The price increase of single-family homes in the United States slowed further in November, according to surveys released on Tuesday. This, coupled with falling mortgage rates, should help to slow the housing market’s further slide into recession.
In November, the S&P CoreLogic Case Shiller national home price index, which covers all nine US census divisions, gained 9.2% annually, a decrease from October’s growth of 10.2%. During the COVID-19 epidemic, an increase in remote employment fueled a property market bubble that drove prices to historic highs.
In November, housing prices declined 0.6% compared to October, marking the fifth consecutive monthly decline.
The housing market has entered a recession due to the Federal Reserve’s quickest rate-hiking cycle since the 1980s. Nonetheless, falling mortgage rates and decelerating home price inflation have fuelled confidence that the housing market would stabilize shortly, albeit at reduced levels.
Last week, the average rate on a 30-year fixed mortgage decreased to 6.13 percent, the lowest level since mid-September, according to statistics from home financing firm Freddie Mac.
The rate fell from 6.15 percent the previous week and from an average of 7.08 percent at the beginning of the fourth quarter, which was the highest level since 2002. However, it remains significantly higher than the average of 3.55% for the same period previous year.
“As rates have declined in the first weeks of the new year, housing market activity has begun to thaw,” said Nicole Bachaud, senior economist at Zillow in Seattle. “However, 2023 will likely remain a relatively subdued year for housing, with many predicting prices will at best remain flat.”
According to a second study from the Federal Housing Finance Agency, home prices increased 8.2% in the 12 months leading up to November, following a 9.0% increase in October.
»Inflation in the US housing market slows further in November«