U.S. home prices fell for a fifth consecutive month on November, down 0.3% on an adjusted basis compared with October but up 7.7% compared with November 2021, according to the S&P CoreLogic Case-Shiller home price index.
The index’s 10-city and 20-city composites, measuring home prices in the 20 largest U.S. metros, each posted an adjusted month-over-month decrease of 0.5%.
On a non-adjusted basis, U.S. home prices posted a 0.6% month-over-month decrease in November, while the 10-city and 20-city composites posted decreases of -0.7% and -0.8%, respectively.
“November 2022 marked the fifth consecutive month of declining home prices in the U.S.,” says Craig J. Lazzara, managing director at S&P DJI. “These declines, of course, came after very strong price increases in late 2021 and the first half of 2022. Despite its recent weakness, on a year-over-year basis the National Composite gained 7.7 percent, which is in the 74th percentile of historical performance levels.”
Miami, Tampa and Atlanta reported the highest year-over-year gains among the 20 cities in November.
Miami led the way with a 18.4% year-over-year price increase, followed by Tampa at 16.9% and Atlanta at 12.7%.
“All 20 cities in our November report showed price declines on a month-over-month basis, with a median decline of 0.8 percent,” Lazzara says. “Moreover, for all 20 cities, year-over-year gains in November were lower than those of October, with a median year-over-year increase of 6.4 percent.”
“Interestingly, home prices in San Francisco were down by 1.6 percent year-over-year, the first negative result for any city since San Francisco’s 0.4 percent decline in October 2019,” he says. “This is the worst year-over-year result for San Francisco in more than 10 years – since a negative 3.0 percent result in March 2012.”
Lazzara notes that the West coast weakness was not limited to California, “as San Francisco was followed by Seattle and Portland at the bottom of the league table.”
“As the Federal Reserve moves interest rates higher, mortgage financing continues to be a headwind for home prices,” he adds. “Economic weakness, including the possibility of a recession, would also constrain potential buyers. Given these prospects for a challenging macroeconomic environment, home prices may well continue to weaken.”