(Newsnation) – After years of sellers making the decision, buyers are the ones making the decision Regain influencewith housing price growth now lagging behind inflation.
The S&P Cotality Case-Shiller national home price index rose 1.5% in August from a year earlier, the weakest annual increase in more than two years, according to data released this week.
This is welcome news for potential buyers who have encountered the matter Standard prices and High mortgage rates But it is less important for homeowners watching their real equity erode.
“With prices growing at half the rate of inflation and many major markets declining, it is clear that the meteoric rise of recent years is over,” said Nicholas Godek, head of traded commodities and fixed-income commodities at S&P Dow Jones Indices. He said in a statement.
Hysteresis is a result of Affordability challenges Which continues to impact buyer demand, limiting transaction activity.
But as is always the case in real estate, the story varies from city to city
Markets that saw the biggest gains in the pandemic era are now seeing the sharpest corrections, Godek said.
Tampa, Florida, had the poorest performance among the 20 cities measured, with home prices down 3.3% from the previous year. Prices in Miami and Phoenix also fell by 1.7% each.
The report adds to the evidence of A Sun Belt slowdownPrices fell in part due to a surge in new construction. Many Florida markets also compete with High insurance costs, HOA fees are higher and concerns about the risks of natural disasters.
On the other end of the spectrum, home prices in New York City (+6.1%), Chicago (+5.9%), and Cleveland (+4.7%) outpaced inflation over the past year.
“Looking ahead, the housing market appears to be finding a new equilibrium after the pandemic boom,” Godek said.
It is unclear whether easing price pressures will be enough to stimulate new demand. Mortgage rates may be more important.
The average interest rate on a 30-year mortgage fell to 6.17% on Thursday – near its lows Within three years, he said Freddie Mac data. Buyers can get more relief after this week Federal interest rate cutthough This is not guaranteed.
Even if interest rates fall to lower levels, many may find it difficult to celebrate, especially since sub-3% mortgages were the norm just four years ago. But those days won’t be coming back anytime soon.