Home Prices Mostly Rise, Even With 7% Mortgage Rates
Q4 saw nearly nine out of 10 markets tracked by NAR increase.
Rising mortgage rates did not prevent approximately nine out of 10 metro markets from registering single-family, existing home price gains in Q4 2022, according to the National Association of Realtors (NAR).
Mortgage rates eclipsed 7% in the quarter, and had fallen to 6.5% on Friday, according to Mortgage Daily News.
NAR Chief Economist Lawrence Yun said in prepared remarks that a slowdown in home prices is underway and welcomed, particularly as the typical home price has risen 42% in the past three years.
He noted these cost increases have far surpassed wage increases and consumer price inflation of 15% and 14%, respectively, since 2019.
The monthly mortgage payment on a typical existing single-family home with a 20% down payment was $1,969 – up 58% year-over-year.
Among the major U.S. regions, the South saw the largest share of single-family existing-home sales (45%) in the third quarter, with a year-over-year price appreciation of 4.9%. Prices grew 5.3% in the Northeast, 4.0% in the Midwest, and 2.6% in the West.
“Even with a projected reduction in home sales this year, prices are expected to remain stable in the vast majority of the markets due to extremely limited supply.”