Home price gains weakened sharply to end 2022, according to S&P Case-Shiller

Higher owe rates weighed connected location terms gains astatine the extremity of 2022. While prices were inactive higher than they were a twelvemonth earlier, the complaint of summation slowed quickly, according to information released Tuesday.

Home prices successful December were 5.8% higher than the erstwhile December, according to the S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index. That is down from a 7.6% yearly summation successful November. Prices are present 4.4% beneath their June peak.

For each of 2022, the 5.8% terms summation was the 15th champion show successful the index's 35-year history, but was good beneath 2021's record-setting 18.9% gain.

The yearly summation for the 10-city composite, which includes the New York and Los Angeles metro areas, was 4.4% successful December, down from 6.3% successful the erstwhile month. The 20-city composite, which includes the Seattle and Dallas areas, marked a 4.6% year-over-year gain, down from 6.8% successful the erstwhile month.

Cities inactive seeing the biggest terms gains were Miami, Tampa and Atlanta – up 15.9%, 13.9% and 10.4%, respectively. All 20 cities reported little prices successful the twelvemonth ending December 2022 versus the twelvemonth ending November 2022.

"The imaginable of stable, oregon higher, involvement rates means that owe financing remains a headwind for location prices, portion economical weakness, including the anticipation of a recession, whitethorn besides constrain imaginable buyers," said Craig J. Lazzara, managing manager astatine S&P DJI. "Given these prospects for a challenging macroeconomic environment, location prices whitethorn good proceed to weaken."

Mortgage rates began rising successful the outpouring of past year, with the mean complaint connected the 30-year fixed indebtedness much than doubling to good implicit 7% by the extremity of October. Rates past pulled backmost somewhat successful December and January, but are present edging person to 7% again.

Home income reacting successful January, with a crisp leap successful properties going nether contract, but that is improbable to proceed successful February with rates higher again and inactive precise small connected the marketplace for sale.

"There is inactive a batch of uncertainty successful the market. Weekly information connected purchaser enactment indicates that homebuyers whitethorn beryllium watching owe rates closely. Sellers volition request to terms their homes appropriately to pull buyers and, arsenic a result, we apt volition spot a continued diminution successful location terms maturation done the archetypal 4th of the year," said Lisa Sturtevant, main economist astatine Bright MLS.