Annual home price gain seen in December was the slowest since August 2020.
US home prices continued to cool across the country, ending 2022 with a 7.6% slowdown in price appreciation rate.
Home prices posted a 5.8% annual gain in December, down from 7.6% in the previous month, according to the S&P CoreLogic Case-Shiller National Home Price NSA Index. The 10-City Composite dropped to 4.4% from 6.3% in the previous month, while the 20-City Composite decelerated to a 4.6% year-over-year pace from 6.8%.
CoreLogic chief economist Selma Hepp had her say on the CoreLogic S&P Case-Shiller National Home Price Index for December that went live this morning: “With a full year of data, S&P CoreLogic Case-Shiller Index once again proved that 2022 was incredibly volatile for the housing market,” she said. “By all accounts, housing markets experienced historic highs and lows in a matter of months. In December, the CoreLogic S&P Case-Shiller Index posted a 5.8% year-over-year increase, marking the eighth straight month of decelerating annual home price gains and a 15-percentage point slower rate of growth than at the peak in May 2022.
“In contrast, December’s annual gain was the slowest since August 2020. Home prices are down 4.4% from spring peak to December, with four times larger declines in San Francisco and Seattle. New York, Cleveland and Chicago are faring relatively better, with total declines at only 3% through December.”
Craig Lazzara, managing director at S&P DJI, commented: “The prospect of stable, or higher, interest rates means that mortgage financing remains a headwind for home prices, while economic weakness, including the possibility of a recession, may also constrain potential buyers. Given these prospects for a challenging macroeconomic environment, home prices may well continue to weaken.”
Lazzara noted that the West coast was the weakest region, with San Francisco reporting the highest decline of -4.2% year-over-year. Miami, Tampa, and Atlanta were the strongest performers, while the Southeast and South were the strongest regions.
“While the rapid reversal of price growth is evident across markets, West and Mountain West continue to lead with declines while some recently hot markets, such as Tampa, Florida, Dallas and San Diego, are rapidly catching up,” Hepp added. “Interestingly though, despite recent price declines, the national annual average growth of 15% for 2022 is still the second highest on record.”