Are Home Prices Finally Piping Down?

The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index reported an 18.8% gain in December, on par with the month prior. According to the report, “December’s 18.8% gain in the national composite is the fifth-highest reading in history.” The housing market is keeping pace with estimates, but will likely face significant headwinds with rising rates and eventual Fed action within the next month.

According to the report, the three (3) major metropolitan cities which notched the largest year-over-year increases were Phoenix, Tampa, and Miami, which rose 32.5%, 29.4%, and 27.3%. Although living somewhere south is obviously warmer and probably much more pleasant, four seasons is just necessary for longevity. Plus fall and winter fashion is honestly just untouchable.

Anyways, going back to the rates discussion, the 30Y fixed rate has climbed back to 2019 levels. While that really isn’t high by any stretch of the imagination (at least historically speaking), any interest rate increase will presumably offset housing costs. More and more buyers will be discouraged (which adds to the already increasing amount of those already) and put more downward pressure on housing prices.

Best of luck to all of those getting into this market. The most immaculate bull run in the history of the universe was fun while it lasted.