Home Price Synopsis
- Home prices have peaked this cycle but the decline is tiny compared to the run up.
- There is a two-month lag in reporting. The latest data is for December and that represents sales primarily made in October and November.
- The declines shown are undoubtedly understated by a lot.
- Declines will accelerate but not fast enough to revive a housing market that has soured dramatically.
Peak From Top Notes
- Chicago and Miami peaked in July of 2022
- Denver, San Diego, San Francisco, and D.C. peaked in May.
- All other cities and the national indexes peaked in June.
The declines range from 1.07 percent for Chicago to 12.67 percent for San Francisco.
These numbers are all stale because the Case-Shiller data always lags greatly, as described above.
The following chart normalizes everything to the national index peak in June.
Change Since June 2022
Compared to June 2022, the national peak, Chicago is only down 0.54 percent.
But Chicago did not have the price appreciation of most other metro areas.
Prices in many places are down much more. Yet, the chart is more accurate than many portray.
For example, in its latest existing home sales report, the National Association of Realtors reported “the median existing-home sales price increased 1.3% from one year ago to $359,000”.
Case-Shiller lags but it finally has the direction correct. On a repeat-sales basis, home prices are not still rising.
Existing Home Sales Decline 12th Month
A brief drop in mortgage rates towards 6.0 percent was not enough to entice buyers in January. Buyers and sellers are on strike.
For discussion, please see No Rebound in Existing Home Sales Despite a Drop in Mortgage Rates
Buyers want lower prices, but sellers want the prices they could have gotten 18 months ago.
And the existing home owners do not want to trade a 3.0 percent mortgage rate for a 6.8 percent mortgage.
People are trapped in their homes, but in a much different way than 2008.
For many additional charts on Case-Shiller home prices and a discussion of housing, please see Case-Shiller Home Prices Slide Another 0.5 Percent, Actual Drop is Much Worse
This post originated on MishTalk.Com.
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“Redfin analyzed home listings in the nation’s 100 most populous metros, marking a listing as affordable if its estimated monthly mortgage payment did not exceed 30 percent of the local county’s median income.
“Housing affordability is at the lowest level in history, which is widening the wealth gap—especially between generations,” said Redfin deputy chief economist Taylor Marr.”