Home price gains continued to drop across the United States according to the latest results for the S&P CoreLogic Case-Shiller Indices. Before seasonal adjustment, the U.S. National Index posted a -0.8% month-over-month decrease in December, while the 10-City and 20-City Composites posted decreases of -0.8% and -0.9%, respectively.
After seasonal adjustment, the U.S. National Index posted a month-over-month decrease of -0.3%, and the 10-City and 20-City Composites posted decreases of -0.4% and -0.5%, respectively.
In December, all 20 cities reported declines both before and after seasonal adjustments.
“The cooling in home prices that began in June 2022 continued through year end, as December marked the sixth consecutive month of declines for our National Composite Index,” said Craig J. Lazzara, Managing Director at S&P DJI. “Prices fell in all 20 cities in December, with a median decline of -1.1%. Moreover, for all 20 cities, year-over-year gains in December (median 4.4%) were lower than those of November (median 6.4%).”
Lazzara pointed out that home prices in San Francisco fell last month on a year-over-year basis. San Francisco’s decline worsened in December (-4.2% year-over-year); its west coast neighbors Seattle (-1.8%) and Portland (+1.1%) once again form the bottom of the league table.
“As was the case last month, December’s best performers were all in the Southeast, with Miami (+15.9%) in the lead for the fifth straight month. Tampa (+13.9%) and Atlanta (+10.4%) continued in second and third place, with Charlotte (+9.9%) not far behind. Unsurprisingly, the Southeast (+12.5%) and South (+11.6%) were the strongest regions, and the West (+1.2%) continuing as the weakest,” he said.
The Index reported a 5.8% annual gain in December, down from 7.6% in the previous month. The 10-City Composite annual increase came in at 4.4%, down from 6.3% in the previous month. The 20-City Composite posted a 4.6% year-over-year gain, down from 6.8% in the previous month.
Miami, Tampa, and Atlanta reported the highest year-over-year gains among the 20 cities in December. Miami led the way with a 15.9% year-over-year price increase, followed by Tampa in second with a 13.9% increase, and Atlanta in third with a 10.4% increase. All 20 cities reported lower prices in the year ending December 2022 versus the year ending November 2022.
“The prospect of stable, or higher, interest rates means that mortgage financing remains a headwind for home prices, while economic weakness, including the possibility of a recession, may also constrain potential buyers. Given these prospects for a challenging macroeconomic environment, home prices may well continue to weaken,” Lazzara said.
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We are seeing a flattened pricing scenario with limited quality listings. I view the outlook as declining with rises in rents and costs of living impacting future buyers negatively to save funds for a purchase. Credit defaults anticipation is rising for lending institutions forecasts to investors.
The real estate industry is seeing once again a rise in cashout loans and this has lead the way to further downward cycles in national financials in the past..
I see a repeat of the 2008-09 cycle and with an election year approaching wonder about the appetite for any big changes in fed policy… guess we shall all see soon enough,, we are all smart in hind sight.