There’s a bit of good news for people who are hoping to buy a home. The rate at which prices are rising slowed dramatically in June, according to housing data firm Black Knight.
Home prices are already at a record high, and rising mortgage rates have put monthly house payments out of reach for millions of Americans. There were fewer buyers in June as a result, and price gains slowed at the fastest rate on record.
The numbers show that year-over-year home price appreciation fell by 2% in June to 17.3%. Even during the housing market crash of 2008-09, prices didn’t slow by more than 1.9% from one month to another.
At the same time, prices are still going up. That’s because the housing market is so out of balance that there are still more people willing and able to purchase a home than there are houses for sale.
Black Knight reports that 25% of major U.S. housing markets saw growth slow by 3% in June. Four markets experienced a 4% or more slowdown. Even so, industry experts say it’s hard to say whether the market is moving in a direction that favors buyers.
“The market is showing signs of an inflection point with supply and days on the market ticking up in some areas,” Michael Gifford, CEO and co-founder of Splitero, told ConsumerAffairs. “With that said, we have been far from a normalized market since the pandemic's start, so change doesn't necessarily mean we are at an inflection point.”
Most expensive markets lost the most value
According to Black Knight data, the markets seeing the biggest slowdown in rising prices are the most expensive housing markets. For example, average home values in San Jose, Calif., fell by 5.1% from the first of May to the end of June.
Home prices have also declined in Seattle, San Francisco, San Diego, and Denver but are still well above the national median. In more encouraging news for buyers, Black Knight found that the supply of available homes increased in June.
However, while inventory increased by 22% during May and June, inventory levels are still 54% lower than from 2017 to 2019, just before the start of the pandemic.
Home foreclosures fell to record lows during the pandemic, but that appears to be reversing slightly. Black Knight reports foreclosure starts rose 27% in June but were 40% below pre-pandemic levels.