Home price gains slowed for the third month in a row in June, rising mortgage interest rates Housing market activity is starting to slow down.
As the S&P CoreLogic Case-Shiller Index showed on Tuesday, prices rose 18.6% year-on-year nationwide in June, down slightly from the 19.7% gain recorded in May.
“The slowdown in U.S. house prices that we began observing months ago continued into June,” said Craig Lazzara, managing director of S&P Dow Jones Indices. It’s clearly rising at a slow pace.”
Case-Shiller Index reporting is two months behind and may not capture the latest slowdown in the market. Another report from the National Association of Realtors last week said median home prices across the country eased slightly in July, dropping from a record high to $403,800. This is an increase of 10.8% from the previous year.
Home sale cancellations surge to another two-year high as buyers pull back
Home prices rose the most in Tampa, Florida, up 35%. Miami followed with his 33% gain, while Dallas trailed hers at 28.2%.
The housing market federal reserve Raise interest rates at the fastest pace in decades to curb hyperinflation. Policymakers have already approved his second consecutive 75 basis point rate hike in June and July, and have confirmed that another super-massive rate hike is under consideration for September. I’m here.
After the rate hike, the average interest rate will be 30 year fixed mortgage – Most popular among new homeowners, rising to nearly 6% in June, but has slowed since. Recent data from mortgage firm Freddie Mac showed that the average interest rate for a 30-year fixed-rate mortgage hovered around 5.13% in the week ending Aug. 18.
This is significantly higher than just a year ago when interest rates were 2.86%.
Rapidly rising borrowing costs coupled with high home prices have forced many entry-level homebuyers out of the market. A new report from his Redfin last week showed that July home sale cancellations surged to a two-year high as buyers retreated from the market. About 63,000 home purchase contracts were canceled in July. This represents his 16% of the homes that were contracted that month.
“With house prices hitting record highs, inflation leading to effective wage cuts for many workers, and mortgage rates 250 basis points above last year’s levels, buyers are pushing the affordability cap. We are starting to find it difficult to face economic research on Realtor.com.
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“Compared to the trend seen during the pandemic, when homebuyers’ fear of missing out on record-low mortgage rates was feverishly seeking safe haven, today’s housing market I’m experiencing some kind of hangover.”