Surveys show that the U.S.’s home price growth slows down in August. By Stocksak

© Stocksak. FILE PHOTO – A sign reading “For Rent, For Sale”, is seen outside a Washington, U.S.A home on July 7, 2022. REUTERS/Sarah Silbiger

WASHINGTON, (Stocksak), August saw a sharp drop in single-family home values in the U.S. as rising mortgage rates dampened housing demand, according to closely monitored surveys.

The S&P CoreLogic Case Shiller national home price index dropped 0.9% on a seasonally adjusted basis after slipping 0.5%

In July. The monthly house prices fell in July for the first-time since late 2018. The August increase in house prices by 13.0% year-over-2018 was slower than July’s increase of 15.6%.

“As the Federal Reserve moves interest rates higher, mortgage financing becomes more expensive and housing becomes less affordable,” Craig Lazzara, managing director at S&P DJI, said in a statement. “Given the continued prospects for a difficult macroeconomic environment, home prices could well continue to decline.”

A separate report by the Federal Housing Finance Agency showed that home prices rose 11.9% in the 12 month period ending August, after rising 13.9% in July. This was in addition to the cooling of house price inflation. Prices fell 0.7% per month.

The Fed is fighting aggressively against the fastest rising inflation in 40-years. It has raised its benchmark overnight rate from nearly zero in March to the current range 3.00% to 3.255%. This is the fastest pace of policy tightening for a generation.

Based on Fed officials’ projections, the rate will end the year in the mid-4 percent range.

Last week’s data revealed that September saw a decline in sales of previously-owned homes for the eighth consecutive month.

According to data from mortgage finance agency, the average 30-year fixed mortgage rate was 6.94% last week. This is a record high in 20-years, an increase from 6.92% in previous weeks. Freddie Mac (OTC:).

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