Home price growth slowed in September for the fourth consecutive month, according to the latest CoreLogic Home Price Index (HPI).
House prices increased by 11.4% annually in September compared to 13.5% in August. Price growth is expected to continue cooling to 3.9% year-over-year by September 2023, according to CoreLogic.
On a monthly basis, home prices dropped by 0.5% in September compared to August, according to the report.
The latest data on the slowdown in price hikes comes as mortgage rates hit a 20-year high earlier this month and housing demand continues to fall.
“The rapid increase in prices during the COVID-19 pandemic caused many U.S. housing markets to reach completely unaffordable levels for potential local homebuyers,” Selma Hepp, CoreLogic’s interim head of the office of the chief economist, said. “On the West Coast and in Mountain-West states, home prices are slowing from this spring’s high but remain elevated from a year ago.”
“By contrast, markets that continue to see an in-migration of higher-income households are still experiencing home price gains that are notably higher than the national rate of appreciation,” Hepp continued.
If you are interested in taking advantage of your increased home value, you could consider applying for a cash-out refinance to access the equity you’ve built up in your home. You can visit Credible to find your personalized interest rate without affecting your credit score.
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Southeastern markets showed the biggest home price increases
The Southeastern states saw the most significant price gains and Florida posted the highest appreciation for “the eighth consecutive month,” CoreLogic said. Miami experienced the highest annual growth of the 20 largest metros, with a 25.6% increase.
Behind Florida, the two states posting the biggest gains were South Carolina, with a 17.6% increase, and Tennessee, with a 17.4% bump.
“Although rising mortgage rates continue to dampen housing demand nationwide, out-migration from more expensive states on the West Coast and in the Northeast is likely fueling homebuyer enthusiasm for properties in relatively more affordable Southeastern states,” CoreLogic said.
If you’ve seen significant home price growth over the past year and want to tap into your equity, you could consider a cash-out refinance. You can visit Credible to compare multiple mortgage lenders at once and choose the one with the best interest rate for you.
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Buyers postponing home purchases until 2023, economist says
The cooldown in home prices hasn’t come fast enough to alleviate the extra costs homebuyers are facing. Rising mortgage rates and still high home prices have put housing “out of reach” for many potential homeowners, according to George Ratiu, a senior economist at Realtor.com.
In September, pending home sales dropped for the fourth consecutive month. Pending transactions fell 10.2% month-over-month and slid 31.0% on an annual basis, according to the National Association of REALTORS (NAR).
“As we look to the remainder of the year, we can expect interest rates to continue their upward trajectory,” Ratiu said in a statement. “For many buyers, especially first-timers, higher borrowing costs mean that a home purchase may be postponed until next year.”
“Prices have been declining from their summer peak, but not fast enough to compensate for much-higher rates,” Ratiu continued. “At the same time, with inventory still rising and time-on-market growing longer, particularly as we go into the colder months, sellers who hope to close a deal before year’s end should expect more flexibility in negotiations.”
If you want to take equity out of your home before rates rise further, you could consider applying for a cash-out mortgage refinance. To see if this is the right option for you, contact Credible to speak to a home loan expert and get all of your questions answered.
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