Home Prices See First Monthly Decline in Years

October 4, 2022

Home prices across the nation slid in July from June, the first monthly decline in years and the latest sign that higher mortgage rates are starting to weigh on the housing market.

The S&P CoreLogic Case-Shiller National Home Price Index, which home prices across the nation, fell 0.3% in July from the prior month. This is the first month-over-month decline in the index since January 2019.

The housing market is highly seasonal, with the summer months being the busiest period. On a seasonally adjusted basis, the national index fell by a smaller 0.2%. However, that was the first monthly decline in more than a decade when adjusting for seasonal differences.

Home prices are continuing to rise on a year-over-year basis, but the pace of growth has slowed. The national index rose 15.8% on a year-over-year basis in July, down from an 18.1% annual increase the prior month.

Industry analysts expect home-price growth to continue cooling throughout at least the end of the year as the Federal Reserve continues to raise interest rates and mortgages continue to climb.

The average rate on a 30-year fixed-rate mortgage was 6.29% in late September, more than double the average 2.88% rate that borrowers could secure a year earlier, according to Freddie Mac.

A separate measure of home-price growth from the Federal Housing Finance Agency found an even larger decline in July, with 0.6% decline from June.

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