The U.S. housing market is slowing, causing house prices to slip for the fourth month in a row.
- After skyrocketing, the housing market has begun to slow—mainly the result of the Federal Reserve raising interest rates to ease inflation.
- Housing prices fell 0.5% from September, the fourth consecutive monthly decline for a seasonally adjusted measure of home prices in 20 large cities, according to the S&P CoreLogic Case-Shiller index.
- High mortgage rates have made houses unaffordable for many, causing demand to slump and fewer houses to be put on the market.
- As demand weakens, many houses are lowering prices in an attempt to get houses to sell, and prices are continuing to drop.
Why it’s news
The housing market has been slowing down as fewer Americans have been buying homes due to high mortgage and housing rates.
The market began to fall in October, being affected by high mortgage rates and an unsettling economic outlook. Many sellers stopped putting houses on the market as fewer buyers were purchasing homes.
Rates for 30-year fixed mortgages reached 7.08% in October and November but have since gone down, according to Freddie Mac data. The high prices spread across the housing market have caused many buyers not to purchase a home, causing fewer sellers to put houses on the market.
“As the Federal Reserve continues to move interest rates higher, mortgage financing continues to be a headwind for home prices,” says Craig Lazzara, managing director at S&P Dow Jones Indice. “Given the continuing prospects for a challenging macroeconomic environment, prices may continue to weaken.”
Although prices are falling, they remain well over what they were last year.