Home-price growth has slowed for the fourth month in a row, as the housing market continues to cool amid high mortgage rates, according to one measure.
Compared to July, home prices have fallen by 0.7%. Three-quarters of states posted declines in August.
On a year-over-year basis, home-price appreciation slowed to 13.5%, compared to a peak of 20.9% in April, according to CoreLogic’s Home Price Index.
The company is forecasting price growth to slow to 3.2% by August 2023.
“The increased cost of homeownership has dampened buyer demand and caused prices to decelerate at a faster pace than initially expected,” Selma Hepp, interim lead of the Office of the Chief Economist at CoreLogic, said in a statement.
To be clear, home prices have risen for the 127th month in a row in August. But the pace of how fast prices are increasing is slowing.
High rates and elevated home prices continue to hurt prospective buyers. The average rate on the 30-year mortgage was 6.69% on Tuesday morning, according to Mortgage News Daily.
The top five markets at risk of home-price declines include Crestview-Fort Walton Beach-Destin, Fla., Bremerton-Silverdale, Wash., Bellingham, Wash., Boise City, Id., and Reno, Nev., CoreLogic said.
“‘The increased cost of homeownership has dampened buyer demand and caused prices to decelerate at a faster pace than initially expected.’”
— Selma Hepp, interim lead of the Office of the Chief Economist at CoreLogic
The biggest month-over-month home price drops were seen in the West Coast and Mountain West, CoreLogic said.
“Housing markets on the West Coast and in the Mountain West, as well as second-home markets, recorded particularly strong price growth in the summer of 2021 but were the first to see month-over-month price declines during the same period this year,” Hepp said.
But even though price growth was slowing, “mortgage rates that are approaching 7% may cut many hopefuls out of the picture,” she added.
Home prices were still going strong in Miami, where home prices grew 27.1% this August as compared to the year before, followed by Tampa.
But Hurricane Ian is expected to dampen price growth in Tampa, as well as other parts of Florida that are dealing with the aftermath and storm damage, CoreLogic said.
In a separate report, CoreLogic estimated that Hurricane Ian was the “costliest Florida storm since Hurricane Andrew made landfall in 1992” and added that the disaster will “forever change the real-estate industry and city infrastructure.”
In terms of states, Florida and Tennessee posted the highest home price gains, CoreLogic said, at 26.4% and 20%.
Washington, D.C. ranked last for home-price growth at 2.4%.
Got thoughts on the housing market? Write to MarketWatch reporter Aarthi Swaminathan at firstname.lastname@example.org