Home prices fell -0.2 percent nationally in July after seasonal adjustment. This is the first national decline since 2012. The managing director of the Case-Shiller Index said that the 2.3 percent difference between the June and July monthly rates of gain is the largest deceleration in the history of the S&P CoreLogic Case-Shiller Index.
Home prices in July were still higher than they were a year ago.
“Although U.S. housing prices remain substantially above their year-ago levels, July’s report reflects a forceful deceleration,” says Craig J. Lazzara, Managing Director at S&P DJI, in a statement.
But, don’t worry, Biden said everything is fine.
A national measure of prices in 20 large cities fell 0.44% in July, the first drop since March 2012, the S&P CoreLogic Case-Shiller index showed Tuesday. The last real estate crash ended in 2012, ushering in 10 years of price gains, capped off by the two-year pandemic buying frenzy.
Bloomberg reports:
But the Federal Reserve has put a swift end to the party as it fights to curb inflation. Mortgage rates this year doubled, pricing out many buyers and causing sales to plunge. Now values are heading south. The biggest month-over-month declines in July were in San Francisco (-3.6%), Seattle (-2.5%), and San Diego (-2%).
“The cooling has come hard and fast,” Stephen Stanley, chief economist at Amherst Pierpoint, said in a note.
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We knew that the Feds decided they’d sacrifice the housing market to try to reduce inflation, but this is some drop in a short span of time.
Housing market update:
1. Fed literally said housing prices will fall
2. Luxury home sales down 28%, biggest drop ever
3. Average mortgage hits 6.3%, highest since 2008
4. Home sales down 7 straight months
5. New listings at lowest since 2020
This is more than a recession.
— The Kobeissi Letter (@KobeissiLetter) September 24, 2022
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