Latest Figures Show Just How Brutal 2023 Was For Home Prices

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Will Kessler Contributor
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Home prices for the 10 largest cities in the U.S. rose by 7.0% year-over-year in December, up from 6.3% in the previous month, according to Standard and Poor’s Case-Shiller home price index report.

The top 20 cities had a slightly less pronounced increase, with prices rising 6.1% year-over-year as of December, up from 5.4% in November, according to the index. The increase in costs is coupled with a rise in the average for a 30-year mortgage rate, which ticked up to 6.90% the week of Feb. 22 after declining slightly from the recent peak of 7.80% that was seen in October, according to the Federal Reserve Bank of St. Louis. (RELATED: New Drug Prices Spiked In 2023 As Biden Admin Seeks To Keep Costs Down)

“U.S. home prices faced significant headwinds in the fourth quarter of 2023,” Brian Luke, head of commodities and real & digital assets at S&P Dow Jones Indices, said in the report. “However, on a seasonally adjusted basis, the S&P Case-Shiller Home Price Indices continued its streak of seven consecutive record highs in 2023. Ten of 20 markets beat prior records, with San Diego registering an 8.9% gain and Las Vegas the fastest rising market in December, after accounting for seasonal impacts.”

The rise in home prices for the 20 biggest U.S. metro areas marks the 11th month in a row that prices have increased, resulting in another record high, according to MarketWatch. Home prices have faced pressure from a shortage in the number of resale homes on the market.

The U.S. National Index, the 20-city index and the 10-city index all had a month-to-month increase of 0.2% when seasonally adjusted but declined between 0.4% and 0.2% when typical seasonal fluctuations were not taken into account, according to the report.

In response to rising housing unaffordability, mortgage applications sank in the week ending Feb. 16 by 10.6% compared to the previous week, while the purchase index fell 10% in that same time. Mortgage rates have faced upward pressure from hikes in the federal funds rate by the Federal Reserve, which has put it in a range of 5.25% and 5.50% in an effort to combat high inflation.

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