Consumers hoping home prices will fall enough for them to buy a house are seeing their wish come true. By one metric, prices fell from July to August at the fastest pace on record.
Make no mistake, prices are still sky-high. But the S&P CoreLogic Case-Shiller Indices, which tracks U.S. home prices, showed a 2.6% decline in annual home price appreciation when compared to the previous month.
The median home price in August was 13% higher than in August 2021. But July’s median price was 15.6% higher year-over-year. The 2.6% difference was the biggest one-month drop-off since the survey began 27 years ago.
The index breaks the country down by market size, with 10 and 20-city averages. Miami, Tampa, and Charlotte reported the highest year-over-year gains among the 20 cities in August.
Prices fell the least in the South
Miami led the way with a 28.6% year-over-year price increase, followed by Tampa in second with a 28.0% increase, and Charlotte in third with a 21.3% increase. All 20 cities reported lower price increases in the year ending August 2022 versus the year ending July 2022. But that doesn’t mean it’s getting any easier to buy a home.
"Despite the ongoing deceleration, August's housing prices remain well above year-ago levels in all 20 cities,” said Craig Lazzara, managing director at S&P Dow Jones. Florida continues to hold the top two spots, with Miami taking the lead over Tampa. Price growth continued strongest in the Southeast and South.
While a slowdown in prices helps, many would-be buyers face strong headwinds in the form of higher interest rates that have sharply reduced home affordability. The decline in home prices can be linked to higher mortgage rates that average more than 7%, more than double last year’s 3% average rate.