Mortgage rates have nearly doubled since the end of 2021
US Home-Price Growth Decelerates for First Time Since 2021
A national measure of prices climbed 20.4% in April, down from the 20.6% gain in March, the S&P CoreLogic Case-Shiller index showed Tuesday. Craig Lazzara, a managing director at S&P Dow Jones Indices, noted that April data was showing initial, but inconsistent, signs of a deceleration in price gains.
Mortgage rates have nearly doubled since the end of 2021. The run-up in rates, combined with high prices, are squeezing potential buyers and starting to slow housing markets in some of the most popular pandemic boomtowns.
Still, Lazzara noted that growth rates are strong by historical standards. A measure of prices in 20 US cities accelerated, climbing 21.2% in April following a 21.1% gain in March, according to the index. Tampa, Florida; Miami and Phoenix had the biggest gains.
“Mortgage financing has become more expensive as the Federal Reserve ratchets up interest rates, a process that had only just begun when April data were gathered,” Lazzara said in a statement. “A more challenging macroeconomic environment may not support extraordinary home price growth for much longer.”
The housing market slowdown is having ripple effects across the industry. Mortgage lenders are forecasting a slump in business and brokerages including Compass Inc. and Redfin Corp. are laying off workers.
The index, which accounts for more than 27 years of data, is an important gauge of the health of the US housing market in part due to its breadth of measurements around the country.