US home prices slide in November for fifth straight month
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Home prices declined again in November as higher mortgage rates continued to weigh on consumer demand for new houses.
Prices slid 0.6% nationally in the period from October to November, the fifth consecutive monthly decline, the S&P CoreLogic Case-Shiller index showed on Tuesday.
On an annual basis, the index climbed 7.7% in November.
"The home price data released today do not account for the full impact of rising mortgage rates, which were above 7% early in November, and led to a significant pullback in buyer activity," said Lisa Sturtevant, the chief economist at Bright MLS. "In many local markets across the country, home prices have fallen precipitously from their summer peaks as buyers were forced out of the market due to affordability challenges."
EXISTING HOME SALES TUMBLED IN DECEMBER FOR 11TH STRAIGHT MONTH, FALLING TO LOWEST LEVEL SINCE 2010
A "For Sale" outside a house in Hercules, California, US, on Tuesday, May 31, 2022. (Photographer: David Paul Morris/Bloomberg via Getty Images) (Photographer: David Paul Morris/Bloomberg via Getty Images / Getty Images)
The 10-city composite, meanwhile, increase 6.3% annually, down from 8% in October, and the 20-city composite rose 6.8% in November, following a gain of 8.6% the previous month. Price growth slowed in all 20 cities.
The Case-Shiller index reports with a two-month delay, meaning it may not capture the latest slowdown in the market.
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Even with higher interest rates putting homeownership out of reach for millions of Americans, prices are still steeper than just one year ago.
The median price of an existing home sold in December was $372,700, a 2% increase from the same time a year ago. This marks the 130th consecutive month of year-over-year home price increases, the longest-running streak on record, according to a separate report published last week by the National Association of Realtors.
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The interest rate-sensitive housing market has borne the brunt of the Federal Reserve's aggressive campaign to tighten policy and slow the economy. Policymakers already lifted the benchmark federal funds rate seven consecutive times in 2022 and are widely expected to approve an eighth increase this week as they try to crush abnormally high inflation.
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Still, mortgage rates are continuing to fall from a peak of 7.08% notched in November. The average rate for a 30-year fixed mortgage fell to 6.15% last week, according to data from mortgage lender Freddie Mac. That remains significantly higher than just one year ago, when rates hovered around 3.56%.
Combined with high home prices, the rapid rise in borrowing costs has pushed many entry-level homebuyers out of the market.