U.S. housing cools further, with prices down 3% from the peak
March 28, 2023 Updated Tue., March 28, 2023 at 6:30 p.m.
From staff and wire reports
The U.S. housing slump stretched into a seventh month in January.
Home prices nationally fell 0.2% from December, according to seasonally adjusted data from S&P CoreLogic Case-Shiller. The index is down 3% from its record high, reached in June.
Prices have continued to soften as seller discounts become more common in a market where buyer demand has been sagging for months. Toward the end of 2022 and into January, mortgage rates eased slightly from the peak in November, giving some house hunters incentive to negotiate a deal.
While prices in January were still higher than they were a year earlier, the pace of gains has cooled. The national index was up 3.8% annually, down from the 5.6% gain in December, nonseasonally adjusted data show.
Not all cities had year-over-year increases. Prices declined 7.6% in San Francisco and 5.1% in Seattle. They were down 1.4% in San Diego and 0.5% in Portland.
According to figures from the Spokane Association of Realtors, the median price of a home in Spokane fell to $370,000. It was roughly the same – $375,000 – in January 2022.
Despite turmoil in the banking industry “the Federal Reserve remains focused on its inflation-reduction targets, which suggest that rates may remain elevated in the near term,” Craig Lazzara, managing director at S&P Dow Jones Indices, said in a statement Tuesday. “Mortgage financing and the prospect of economic weakness are therefore likely to remain a head wind for housing prices for at least the next several months.”
The housing market is now in what’s traditionally its busiest season, when families rush to settle into new homes before the next school year starts. But higher borrowing costs and uncertainty over the economy are likely to continue to limit demand this spring, according to Hannah Jones, economic data analyst at Realtor.com.
In addition, Fed Chair Jerome Powell signaled last week that the regional banking crisis may lead to stricter lending requirements, which in turn could make getting a mortgage more difficult.
“This spring’s sales pace is expected to remain lower than last year,” Jones said. “Many sellers will feel the pressure to list their home for a lower price to ensure sufficient buyer attention and a quick sale.”
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