May 24, 2024

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Home price gains have eased sharply through the end of 2022: S&P Case-Shiller

Home price gains have eased sharply through the end of 2022: S&P Case-Shiller

A “For Sale” sign in front of a home in Roseville, Calif., on Tuesday, Dec. 6, 2022.

David Paul Morris | bloomberg | Getty Images

Higher mortgage rates weighed on home price gains at the end of 2022. And while prices were still higher than they were a year ago, the rate of increase has slowed rapidly, according to data released Tuesday.

Home prices in December rose 5.8% from the previous December, according to the S&P CoreLogic Case-Shiller US National Home Price Index (NSA). This is down from its annual gain of 7.6% in November. Prices are now 4.4% lower than their peak in June.

For the full year of 2022, the price gain of 5.8% was the 15th best performance in the index’s 35-year history, but it was well below the record 2021 gain of 18.9%.

The annual increase for the 10-city complex, which includes the New York and Los Angeles metro areas, was 4.4% in December, down from 6.3% the previous month. The 20-city composite, which includes the Seattle and Dallas areas, reported an increase of 4.6% year over year, down from 6.8% in the prior month.

The cities still seeing the largest price gains were Miami, Tampa, and Atlanta — up 15.9%, 13.9%, and 10.4%, respectively. All 20 cities recorded lower prices in the year ending December 2022 compared to the year ending November 2022.

said Craig J. Lazzara, managing director of S&P DJI. “Given these prospects for a challenging macroeconomic environment, home prices may continue to weaken.”

Mortgage rates began to rise in the spring of last year, with the average 30-year fixed rate loan rate doubling to more than 7% by the end of October. Prices then eased a bit in December and January, but are now close to 7% again.

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Home sales responded in January, with a sharp jump in properties under contract, but that is unlikely to continue in February as prices are rising again, and there is still very little in the market to sell.

“There is still a lot of uncertainty in the market. Weekly data on buyer activity suggests that homebuyers may be watching mortgage rates more closely. Sellers will need to price their homes appropriately to attract buyers, and as a result, we will likely see continued mortgage rates,” said Lisa Sturtevant. , chief economist at MLS Bright, said the decline in home price growth during the first quarter of the year.