The pandemic housing boom is officially over. Home price appreciation has stalled, with markets in the West leading the nation in declines, according to a new report.
“Pandemic Boom Markets Cooling the Fastest,” a report from First American, looked at affordability as part of its Real House Price Index, and found that the doubling of mortgage rates has seriously hit home buyers’ spending potential.
In August, real house prices (which are inflation-adjusted) jumped 49% compared to the previous year. But between July and August, real home prices fell 1.8%, according to the company.
Expect home price appreciation to “fall further,” Mark Fleming, chief economist at First American and author of the report said, “as the hot sellers’ market of early 2022 turns in favor of buyers.”
The 30-year fixed-rate was averaging at 7.32% as of Friday, according to Mortgage News Daily.
Fleming told MarketWatch in an interview that home price appreciation could go down to low single-digits, but stressed that home prices had shot up so much that they weren’t exactly crashing.
“Prices are coming down, appreciation is moderating in the housing market more broadly. We’re still selling 4.7 million homes a year, the typical amount of time is 19 days to sell a home — this doesn’t sound like a recession,” Fleming said.
Looking at home price appreciation in the top 50 markets in the country, Fleming found that many in the West are among…
