June Home Prices Flattened From a Year Earlier; Skyrocketing Mortgage Rates Could Impact Ongoing Pricing Ebb and Flow
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Barron's reports that U.S. real estate prices were mostly flat or declining in June 2023, compared with June 2022, citing S&P CoreLogic Case-Shiller home-price indices. Home prices fell 1.2% in 20 large cities, down 0.02% nationwide, compared with a year earlier.
However, Barron's attributed fluctuations, at least in part, to factors other than ordinary market forces. And more recent, but less comprehensive data cited by the National Association of Realtors, found that July 2023 prices were higher than a year earlier.
In June 2022, historically low mortgage rates had prompted greatly expanded home-buying with high demand outpacing limited supply. Subsequent increases in mortgage rates sent demand in the opposite direction, with prices sliding through January, after which they started rising again.
Meanwhile, rising mortgage rates also appear to be discouraging existing homeowners from selling, if giving up their current home means purchasing a new one elsewhere at newer, higher mortgage rates.
Mortgage rates in August 2023 are above 7%, the highest in decades.
Meanwhile, rising mortgage rates and any general economic weakness could cause demand to start constricting again, also potentially impacting home prices.
Key Words: Real Estate Prices, Mortgage Rates
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