Home prices posted their first year-over-year price decline in 11 years in April, as higher mortgage rates made home purchases more expensive for buyers.
The S&P CoreLogic Case-Shiller National Home Price Index, which measures home prices across the nation, fell0.2% in April, compared with a0.7% annual growth rate the prior month. The annual decline was the first for the index since April 2012.
Compared with the previous month, the index rose0.5% in April on a seasonally adjusted basis, the third straight monthly increase. Mortgage rates rose rapidly in 2022, causing a slowdown in home sales as buyers backed away from the market.
Housebuying affordability in April fell to its lowest level since November, according to the Federal Reserve Bank of Atlanta. But prices haven’t declined as much as many economists expected, because the higher mortgage rates made current homeowners reluctant to sell, keeping the supply of homes on the market lower than normal.
The average rate for a 30-year fixed mortgage was6.67% in the week ended June22, up from 5.81% a year earlier, according to Freddie Mac. The Case-Shiller index, which measures repeat-sales data, reports on a two-month delay and reflects a three month moving average.
Homes usually go under contract a month or two before they close, so the April data is based on purchase decisions made early this year or late last year. “The U.S. housing market continued to strengthen in April,” said Craig Lazzara, managing director at S&P Dow Jones Indices.
“Home prices peaked in June 2022, declined until January 2023, and then began to recover.
”The median existing-home price fell 3.1% in May from a year earlier to $396,100, according to the National Association of Realtors.
Source: Wallstreet Journal