US home-price growth slows as high mortgage rates squeeze demand
HOME-PRICE growth in the US decelerated in November as high mortgage rates weighed on potential buyers.
A national gauge of prices climbed 0.2 per cent in November from October, according to seasonally adjusted data from S&P CoreLogic Case-Shiller. That’s slower than the 0.6 per cent gain in October from a month earlier.
Buyers have been sidelined by high mortgage rates, which hit a recent peak in October at 7.79 per cent. While borrowing costs have since eased, buyers are still confronting a major affordability crunch, with prices remaining relatively high due to a lack of homes for sale.
On a year-over-year basis, price gains accelerated with a 5.1 per cent increase in November, up from 4.7 per cent a month earlier. A measure of 20 cities rose 5.4 per cent with Detroit posting the biggest gains, followed by San Diego. Portland, Oregon, was the only city reporting lower prices compared to a year ago.
House hunters have been facing the lack of supply for months now, which pushed sales of previously owned homes in 2023 down to the worst level in nearly three decades. New home sales have fared better, exceeding economists’ forecasts in December.
The Federal Reserve has indicated that it’s turning its attention to rate cuts, moves that may help lower mortgage rates. Investors have been seeking to gauge the future timing of any cuts from the central bank, which is scheduled to meet later this week.
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Mortgage rates have “since fallen over 1 per cent, which could support further annual gains in home prices,” Brian Luke, head of commodities, real and digital assets at S&P Dow Jones Indices, said in a statement. BLOOMBERG
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