In November, home prices declined again as consumer demand for new houses was weighed down by higher.
The S&P CoreLogic Case-Shiller index showed on Tuesday that prices fell 0.6% nationally in the period from October to November, the fifth consecutive month of decline.
The index climbed 7.7% on an annual basis in November.
Lisa Sturtevant, chief economist at Bright MLS, said that the home price data did not account for the full impact of rising mortgage rates, which were above 7% early in November. Home prices have fallen precipitously from their summer peak in many local markets, as buyers have been forced out of the market due to affordability challenges. The 10 city composite increased by 6.3% annually, down from 8% in October, and the 20 city composite increased by 6.8% in November, following a gain of 8.6% the previous month. Price growth slowed in all 20 cities.
The Case-Shiller index reports with a two-month delay, meaning it may not capture the latest slowdown in the market.
The prices are still steeper than just one year ago, even with higher interest rates putting homeownership out of reach for millions of Americans.
The median price of an existing home sold in December was $372,700, a 2% increase from the same time a year ago. This is the 130th consecutive month of year-over-year home price increases, the longest-running streak on record, according to a separate report released last week by the National Association of Realtors.
The aggressive campaign to tighten policy and slow the economy has caused the housing market to suffer the brunt of the interest rate-sensitive housing market. In 2022, policymakers have lifted the benchmark federal funds rate seven times in a row, and are expected to approve an eighth increase this week as they try to crush abnormally high inflation.
Mortgage rates are still falling from a peak of 7.08% notched in November. The average mortgage rate dropped to 6.15% last week, according to Freddie Mac's data. That remains higher than just a year ago when rates hovered around 3.56%.
The rise in borrowing costs has pushed entry-level homebuyers out of the market, combined with high home prices.