‘Mortgage Financing Remains a Headwind for Home Prices’: Home-Price Growth Slows in December, With San Francisco Leading the Way MABA MassachusettsRealEstate FirstTimeHomeBuyers MaBuyerAgent

The numbers: The S&P CoreLogic Case-Shiller twenty city house price index rise fell point five percent in December, its sixth monthly decline.

Year-over-year appreciation was still up four point six percent, but has slowed down from a six point eight percent annual increase in the previous month.

A broader measure of home prices, the national index, fell a seasonally adjusted point three percent in December, but was up five point eight percent over the past year.

Key details: Miami, Tampa and Atlanta reported the highest year-over-year gains among the twenty cities in December.

San Francisco, Seattle and Portland reported the lowest year-over-year gains. San Francisco has seen home-price growth fall by four point two percent from last December.

Here’s the full list of twenty cities and their home prices:

A separate report from the Federal Housing Finance Agency showed home prices falling in December, down point one percent from the prior month.

And over the last year, the FHFA index was up eight point four percent.

Big picture: Home prices reflect the major slowdown the interest rate-sensitive housing sector went through at the end of last year.

And with mortgage rates back up, housing sales are poised to take a hit, meaning that home prices will likely continue this downward slide in the coming months.

What S&P said: “The prospect of stable, or higher, interest rates means that mortgage financing remains a headwind for home prices, while economic weakness, including the possibility of a recession, may also constrain potential buyers,” Craig J. Lazzara, managing director at S&P DJI, said.

“Given these prospects for a challenging macroeconomic environment, home prices may well continue to weaken,” he added.

What are they saying? “Home prices continued to recede modestly in December, largely in line with expectations,” Stephen Stanley, chief U.S. economist at Santander U.S. Capital Markets, wrote in a note.

“After surging by roughly forty percent over the two years from the spring of 2020 to the spring of 2022, home prices gave back a sliver of that appreciation in the second half of last year.  We may be in for more of the same for at least the first part of 2023, but when all is said and done, I believe that the retracement will be a fraction of the pandemic era run-up,” he added.

Market reaction: The Dow Jones Industrial Average and the S&P 500 were mixed in early trading on Tuesday. The yield on the ten year Treasury note rose above three point ninety six percent.

The post ‘Mortgage Financing Remains a Headwind for Home Prices’: Home-Price Growth Slows in December, With San Francisco Leading the Way appeared first on Real Estate News & Insights | realtor.com®.

FIRST TIME HOMEBUYERS

Selecting the Right Homebuyer's agent

Unlike most other real estate agents, a MABA home buyer's broker never represents both a buyer and seller in the same transaction so you never have to worry whether a MABA agent is really looking out for your best financial interests. A MABA buyer's agent acts as your advocate, real estate educator, advisor and negotiator, always loyal to you and dedicated to helping you find and buy the best home with the best terms at the price and showing you which homes to avoid along the way.

Fewer than one percent of the agents and brokers in Massachusetts meet our high standards. 

Whether you are ready to buy now or just beginning your home buying journey, click here to choose a Great Buyer's Agent to answer all of your home buying questions!