Home prices in America fell for the sixth month in a row
Home prices in the United States fell in December for the sixth month in a row, dropping the important S&P CoreLogic Case-Shiller index of house prices, by 2.7% from its peak in June, following buyers withdrew from the market at the end of last year, A rejection of the interest rates applied to mortgage loans, which have more than doubled since January.
The interest rates applied to mortgage loans were not the only pressure on buyers, as their ability to afford high prices, which reached record levels during the pandemic, was also drained.
And with activity in the real estate market slowing, starting in the second half of the year ended, the total value of US homes fell by $2.3 billion, as estimated by Redfin Corp., a real estate brokerage, last week.
In conjunction with the decline in the intensity of the competition to buy homes, the market has turned into a buyers’ market, and the highest word in it has become for those who have the necessary cash to buy, according to “Bloomberg” agency.
Redfin Corp. said prices in December remained higher than they were a year ago, but the pace of gains eased, and the price index rose 5.8% year-on-year, following rising 7.6% in November.
Not all regions experienced year-on-year increases, for example, prices decreased by 4.2% from December 2021 in San Francisco, and by 1.8% in Seattle.
Interest rates applied to mortgage loans, following falling at the beginning of this year, encouraged some buyers. Deals for purchases of previously owned US homes rose by 8.1% in January from December, in the largest jump in prices since June 2020, according to the National Association of Brokers. Realtors on Monday.
With the main selling season approaching in the spring, the road is still bumpy for the market, which is of particular importance in the US economy, as borrowing costs rose during the month of February, and the minutes of the last Federal Reserve meeting, and following it statements by many of its officials, showed their preference to keep Interest rates have been at their high levels for longer periods than markets expected, to ensure that high inflation is eliminated.
This week, the 10-year US Treasury yield, the most important component of the mortgage interest rate, rose above 3.98% for the first time since the second week of November.
“Bloomberg” said that these developments would limit buyers’ requests, and discourage existing owners, who bear low interest rates on their loans, from selling their properties.
And with the apparent confusion in the markets now, the homes offered have remained on the market for longer periods, which prompted sellers to offer greater discounts.
On Tuesday, Craig Lazzara, managing director at S&P Dow Jones Indices, said in a statement, “The prospect of a stable or higher interest rate means that mortgage financing continues to be a headwind for home prices, while economic weakness, including the possibility of a recession, It may also restrict potential buyers.
“Given the current macroeconomic environment, home prices may continue to decline,” he added.
