US home prices are losing steam with most big markets below peak
Homeowners in parts of the US have already seen an erosion of wealth
[MARYLAND] The US housing market is close to stalling out, with prices in more than half the country’s top 100 housing markets now below their peak, according to the latest data from Intercontinental Exchange.
The annual nationwide price increase slowed to 1.3 per cent in June, the slowest pace in two years and down from 1.6 per cent the previous month, ICE’s indexes show. Out of the biggest 100 markets, 51 are now below-peak and almost one-third have fallen at least a percentage point from recent highs.
The weakness was most pronounced in the condo market, where prices fell 1.4 per cent year on year compared with a 1.6 per cent rise for single-family homes. Overall, national prices rose just 0.03 per cent from the previous month after seasonal adjustment, “suggesting a propensity for further slowing”, ICE said. It described the market as “at a critical inflection point”.
Persistently high mortgage rates, which make monthly payments unaffordable for many Americans, continue to drag on housing demand. Even after a recent drop, the typical rate for a 30-year loan remains not far short of 7 per cent. That’s been countered by a boost in homes available for sale in some areas, particularly the South and West, but in many markets, supply remains tight.
Homeowners in parts of the US have already seen an erosion of wealth.
Median prices have fallen more than US$100,000 from their peak in the Austin-Round Rock-San Marcos metro area in Texas, as well as in San Francisco, according to ICE. Florida is home to nine of the 10 major markets that posted the biggest monthly drops in June.
In two of them, North Port-Bradenton-Sarasota and Cape Coral-Fort Myers, prices peaked in June 2022 and are down by more than US$50,000 since then. BLOOMBERG
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