• Home Prices Decline for Sixth Straight Month

    March 07, 2023
    home prices still rising

    Home prices have declined for six straight months every month from July 2022 through December 2022. In December they declined by 0.8% from November, the largest monthly decline since September.

    Why it matters: Home prices are cooling because of higher interest rates. The average 30-year fixed-rate mortgage is now well over 6%. Up from over 3% at the start of 2022.

    • The Fed has been raising interest rates since March of 2022 to bring down high inflation.
    • The housing market is a major component of the economy and prices skyrocketed during COVID. Getting them down is a key part of taming inflation.

    Be smart: Housing prices can still fall more before the drop becomes concerning. They are up almost 6% on an annual basis and had been up as much as 21% last summer.

    • More recent data shows the housing market may be improving. New home sales, pending sales, and permits all rose in January. Home builder optimism jumped up 20%.

    Looking ahead: The built-up demand for housing and a lack of supply likely means that housing prices won’t fall (on an annual basis), which is good news for homeowners. The ease in price increases continues to be good news for buyers.