House prices in the United States fell for the fourth consecutive month as high interest rates and persistent inflation dampen the housing market, data showed on Tuesday.
The S&P CoreLogic Case-Shiller National Home Price Index, a gauge of home prices across the country, fell 0.3% from September to October following seasonal adjustments.
This is the index’s fourth consecutive monthly decline following peaking in prices last June, Craig Lazzara, managing director of S&P Dow Jones Indices, said in a statement.
“Prices fell in all cities last October,” he said.
“These declines of course came following very strong price increases at the end of 2021 and in the first half of 2022,” added the analyst.
After more than a decade of steady increases, house prices have fallen over the past six months as the Federal Reserve (Fed) continues to try to control inflation.
The Fed’s rapid rate hikes have pushed 30-year fixed-rate home loans above 6%, making homes much less affordable for many buyers.
“For most of the economy, rising interest rates take time to have an effect, but housing is one of the sectors of the economy that is more directly (and quickly) affected,” said noted Chris Zaccarelli, chief investment officer for Independent Advisor Alliance, in an analysis released Tuesday.
” Of the [taux] higher rates from the Fed quickly translate into higher mortgage rates, which has an immediate impact on the monthly payments of potential buyers,” he explained.
The slight decline in house prices brought little relief to buyers following more than a year of rapid price increases.
High mortgage prices and rates are expected to continue to weaken the housing market through 2023.
