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S&P Case-Shiller: December Home Price Growth Slows

March 2, 2023 by George Duarte

S&P Case-Shiller: December Home Price Growth SlowsHome price growth slowed in December according to the S&P Case-Shiller 20-City Home Price Index. Year-over-year home prices rose by 4.6 percent in December as compared to November’s reading of 6.8 percent growth. Rising mortgage rates caused home prices to dip as potential buyers delayed home purchases and demand for homes fell.

Craig J. Lazzara, managing director of S&P Dow Jones Indices, said: “The prospect of stable, or higher mortgage 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. Mr. Lazzara concluded: “Given these prospects for a challenging macroeconomic environment,  home prices may well continue to weaken.”

The S&P Case-Shiller National Home Price Index fell by a seasonally-adjusted figure of -0.30 percent in December but rose by 5.80 percent year over year.

S&P Case-Shiller 20-City Index Shows Slowing Home Price Growth for December

Nationally home prices fell by -0.30 percent month-to-month and were 5.80 percent higher year-over-year.

Case-Shiller’s 20-City Home Price Index is widely used as a benchmark for U.S. home prices; December’s top three cities for rising home prices were Miami, Florida with 15.90  percent year-over-year home price growth; Tampa, Florida followed with 13.9 percent home price growth and Atlanta, Georgia reported 10.4 percent year-over-year home price growth in December.  The 20-City Index reported 4.60 percent year-over-year home price growth as compared to November’s reading of 6.80 percent year-over-year home price growth.

Home prices fell the most in formerly hot markets; in San Francisco, California home prices dropped by -4.20 percent year-over-year and home prices fell by -1.80 percent in Seattle, Washington. Portland, Oregon had the lowest pace of home price growth with a year-over-year reading of 1.10 percent.

In related news, the Federal Housing Finance Agency reported home price growth data for homes owned or financed by Fannie Mae and Freddie Mac. Home prices rose 8.40 percent year-over-year between the fourth quarters of 2021 and 2022.

Analysts said that lower home prices were caused by rising mortgage rates and lower demand for homes caused by buyers’ concerns about a possible recession. Limited supplies of available homes helped reduce potential losses caused by less buyer demand for homes. High mortgage rates, competition with cash buyers, relatively high home prices, and slim supplies of available homes continue to present challenges to first-time and moderate-income home buyers.

 

Filed Under: Financial Reports Tagged With: Case Shiller, Financial Report, Home Prices

What’s Ahead For Mortgage Rates This Week – February 21, 2023

February 21, 2023 by George Duarte

What's Ahead For Mortgage Rates This Week - February 21, 2023Last week’s economic news included readings on housing markets, inflation, retail sales, and data on housing starts and building permits issued. Weekly readings on mortgage rates and jobless claims were also published.

NAHB: Homebuilder sentiment improves in February

The National Association of Home Builders reported higher builder confidence in current U.S. housing market conditions with an index reading of 42 for February; Analysts expected a reading of 37 and January’s reading was 35. NAHB index readings over 50 indicate that most home builders have a positive view of housing market conditions.

Factors influencing positive builder sentiment included lower mortgage rates and expectations of less severe winter weather conditions as spring approaches. February’s reading was the second consecutive month for improved builder sentiment since September 2022; and was the first time builder sentiment improved at its current pace since June 2013. The NAHB said in its statement that “the housing market may be turning a corner.”

In related news, The Commerce Department reported that 1.34 million building permits were issued in January, which fell short of the expected reading of 1.35 million building permits issued and matched December’s reading. Year-over-year housing starts were reported at  1.31 million starts in January; analysts expected a reading of 1.35 million housing starts and December’s reading showed 1.37 million housing starts.

January retail sales rose by 3 percent and exceeded expectations of a 1.9 percent increase in retail sales and surpassed December’s negative reading of  -1.1 percent. Retail sales excluding the automotive sector rose by 2.3 percent in January and exceeded expectations of a 0.9 percent increase and December’s negative reading of  -0.9 percent.

Mortgage rates rise as jobless claims fall

Freddie Mac reported higher average mortgage rates last week as the rate for 30-year fixed-rate mortgages rose by two basis points to 6.32 percent. The average rate for 15-year fixed-rate mortgages rose by 15 basis points to 5.51 percent.

First-time jobless claims fell to 194,000 initial claims filed last week as compared to the expected reading of 200,000 claims filed and the prior week’s reading of 195,000 first-time claims filed. 1.70 million continuing jobless claims were reported last week as compared to the previous week’s reading of 1.69 million ongoing claims filed.

What’s ahead

This week’s scheduled economic reporting includes readings on sales of new and previously-owned homes, minutes of the February 1 meeting of the Federal reserve’s Federal Open Market Committee, and monthly data on inflation and consumer sentiment. Weekly readings on mortgage rates and jobless claims will also be released.

Filed Under: Financial Reports Tagged With: Case Shiller, Financial Report, Jobless Claims

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