U.S. home prices decreased 0.1% in November compared with October, signaling that home price growth may have fully flattened since the first time since the pandemic, according to First American’s home price index.
Year over year, home prices in November were up 3.9%.
Home prices nationally are now 54.7% higher compared to pre-pandemic levels (February 2020), according to First American’s data.
The previous month’s results were also basically flat. That data was revised down 0.03 percentage points, from -0.048% to -0.075%.
So, does this really mean that the home price roller-coaster ride since the pandemic is finally over?
“After a nearly year-long slow down, national house prices re-accelerated modestly for the first time since December 2023 on an annualized basis, but remain in line with historical norms,” says Mark Fleming, chief economist at First American, in a statement. “As the housing market adjusts to the new normal of higher mortgage rates, buyers and sellers are gradually returning, supported by a healthy labor market and more homes for sale compared to last year. The result is steady, single-digit house price growth, reflecting a market returning to normal following the pandemic-to-post-pandemic roller-coaster ride.”
Despite mortgage rates staying well above 6% during the past several months, home prices have been holding, due mainly to lack of inventory.
“While some may have expected sustained higher mortgage rates to drive widespread house price declines, prices have proven resilient, falling in only two markets year over year last month,” Fleming says. “House prices tend to be ‘downside sticky’ because home sellers would rather withdraw from the market than sell at a discount.”
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