s&p case shiller us national home price index

 

What the numbers say: The S&P / Case-Shiller U.S. National Home Price Index shows that residential home prices reached historic highs in 2022 before falling in early 2023.  Relevance: According to the National Association of Realtors (NAR), the median home sale price in 2022 was up 10.2% from a year prior. However, 2022 saw the lowest volume of house sales since 2014, with only 5.03 million homes sold ― down 17.8% from 2021.  After a rapid rise in real estate prices that began in the early days of the pandemic, the U.S. real estate market is finally cooling off. Lawrence Yun, the chief economist for the NAR, said: "Half the country is experiencing price declines." Why it matters: Rick Sharga of market analytics firm ATTOM Data said his firm expects a median price drop of 5% in 2023. However, NAR data shows that inventory levels are likely to continue near historic lows, which will prevent home prices from falling dramatically. In addition, prospective home buyers are likely to stay off the market until interest rates fall. At present, 70% of homeowners have a fixed mortgage rate of 4% or less but the interest rate for a 30-year fixed mortgage is now at 6.73%. In addition, recession fears and high inflation will likely push many potential buyers on the sidelines for the time being.