House price growth slowed in July, but growth remains strong
House price growth slowed for the third month in a row in July, indicating that rising mortgage rates activity in the housing market begins to slow down.
Prices rose 15.8% nationwide in July from a year earlier, a notable drop from the revised 18.7% gain recorded in June, the S&P CoreLogic Case-Shiller Index showed on Tuesday.
“The July report reflects a strong slowdown,” said Craig Lazzara, managing director of S&P Dow Jones Indices. “The -2.3% difference between these two monthly growth rates is the biggest slowdown in the history of the index.”
The 10-city composite, meanwhile, rose 14.9% year-on-year from 17.4% in June, and the 20-city composite rose 16.1% from 18.7% the previous month. .
Home prices rose the most in Tampa, Florida, at 31.8%. It is followed by Miami with an increase of 31.7%. Dallas, Texas was third with 24.7%.
The Case-Shiller Index is released with a two-month delay, which means it may not reflect the latest slowdown in the market.
Even though higher interest rates make homeownership out of reach for millions of Americans, prices are still higher than they were a year ago.
separate report from National Association of Realtors Last week, the national median home price eased slightly in August, falling from a record high of $413,800 in June to $389,500. This is still 7.7% more than a year ago.
In recent months, the housing market, which is sensitive to interest rates, has begun to noticeably cool down. Federal Reserve is taking steps to tighten monetary policy at the fastest pace in three decades. Politicians have already raised the federal funds rate five times in a row, including three consecutive increases of 75 basis points, and show no signs of slowing down.
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Average rate for 30 year fixed mortgage rose to 6.29% in the week ended September 22, according to the latest data from mortgage lender Freddie Mac. This is significantly higher than just a year ago, when rates were 2.88%.
Combined with high home prices, the rapid rise in borrowing costs has forced many entry-level homebuyers out of the market.
A new report from Redfin, released on Monday, showed that home sales cancellations jumped year-over-year in August as buyers pulled out of the market.
About 64,000 home purchase agreements were terminated in August, representing 15.2% of homes completed that month.
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