Rate hikes doom US housing boom
The pandemic-era boom in the US housing market appears to be coming to an end — with prices decelerating at their fastest annual pace on record in July, according to the latest S&P CoreLogic Case-Shiller Index data released Tuesday.
Home prices were still increasing year-over-year in July, but the rate of growth is falling fast. Prices at the national level rose by 15.8% for the 12 months ending in July, but the rate of increase was down from an 18.1% increase in June.
The 2.3% decline in month-over-month growth was the largest deceleration on record for the S&P CoreLogic Case-Shiller Index.
“Although US housing prices remain substantially above their year-ago levels, July’s report reflects a forceful deceleration,” said Craig J. Lazzara, managing director at S&P DJI.
The market has rapidly cooled in recent months as mortgage rates surge in response to the Federal Reserve’s interest-rate hikes. As of last week, the average 30-year fixed-rate mortgage was 6.29%, up by a whopping 3.41% since the same week one year ago.
As The Post has reported, rising mortgage rates have further hampered affordability for prospective buyers who already faced the dual crunch of expensive pandemic-era home prices and decades-high inflation.
The Case-Shiller 10-City Composite index, which includes prices in major metro areas such as Boston, Miami and New York, reported an annual increase of 14.9% in July, down from 17.4% the previous month. The 20-year Composite index gained 16.1%, down from 18.7%.
On a monthly basis, home prices actually shrank from June to July. The seasonally adjusted national index shrank by 0.2%, marking the first decline by that measure since early 2012.
The 10-City Composite index fell by 0.5% monthover-month. The larger 20City Composite index showed a 0.4% monthly decline — the first monthly decrease since March 2012.
Just seven cities tracked in the S&P CoreLogic CaseShiller Index reported increased home prices in July.