Home prices down year-over year, breaking record 131-month streak of increases
Existing home prices in the US fell for the first time in about eleven years. The National Association of Realtors reported that the median existing-home price for all housing types was $363,000, a decline of 0.2% from February 2022. The current streak of 131 months in housing price growth represents the longest on record.
The decline in prices comes as rising interest rates, driven by the Federal Reserve, have led to increases in mortgage rates that have caused demand to fall and home sellers to lower their prices. It is worth noting that existing-home sales rose in February, after months of declines, by 14.5% to a seasonally adjusted annual rate of 4.58 million. Additionally, multiple offers are returning on a good number of properties due to low inventory levels still at historic lows.
The latest housing report by Redfin indicates that the industry has seen the first annual decline since 2012, after surging above 7%, mortgage rates are now at 6.6% for a 30-year fixed-rate mortgage, according to Freddie Mac. Despite a 0.13-percentage-point decline from the week before, Goldman Sachs researchers predict bigger declines in housing prices this year, with overheated markets like Austin, Texas, expected to fall by more than 15% this year alone. Home prices are also expected to drop by more than 10% this year and in 2024 in Phoenix, Denver, Seattle, San Diego, and San Francisco.
It’s not all doom and gloom, though, Lawrence Yun, Chief Economist at NAR, says home buyers looking to take advantage of changing mortgage rates are driving stronger sales gains in areas where local economies are adding jobs and home prices are decreasing.
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