For the first time in 11 years, the housing market is experiencing a decline in home prices on a national level. According to the S&P CoreLogic Case-Shiller National Home Price Index, there was a 0.2% drop in prices in April, as reported by the Wall Street Journal. This is the first time since April 2012 that prices have fallen from the previous year. One of the reasons for this decline is the increase in mortgage rates that occurred last year, leading to slower sales. However, when looking at monthly figures, the index reveals a seasonally adjusted increase of 0.5% for April, which marks the third consecutive month of rising prices. The Federal Reserve Bank of Atlanta has reported that affordability for buyers in April was at its lowest point since November.
The Federal Housing Finance Agency has also shown a seasonally adjusted monthly price increase of 0.7% for April, as reported by Yahoo Finance. Another factor contributing to the rise in prices is the low inventory available in the housing market. Some economists predict a further decrease in prices, but higher mortgage rates may be deterring homeowners from selling their properties. Freddie Mac reports that the average rate for a 30-year fixed-rate mortgage was 6.67% in the week ending June 22, up from 5.81% compared to the previous year. Mark Fleming, Chief Economist at First American, explains that while this increase in prices benefits homeowners by boosting their equity, it also puts pressure on potential first-time homebuyers in terms of affordability. (Read more home prices stories.)
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