Has Home Price Growth Already Peaked?

Home sales are slowing across the nation as prices continue to register double-digit growth on an annual basis, but according to Realtor.com, runaway real estate inflation may finally be slowing. While home prices rose for the 39th straight week at the start of September, a growth measurement of 11.9% during the week ending September 10 was markedly lower than the 15%-16% range seen in July.

Slower home price growth can be attributed in part to seasonality, but a housing downturn has also been a long time coming after a series of interest rates initiated by the Federal Reserve in its widespread effort to control inflation. As inventory falls and home sales slow, so too will home prices, though buyers may not see a noticeable change for months to come as housing costs remain at historic highs.

“Although home prices continue to register double-digit growth relative to one year ago, the rate took a notable step back this week to the lowest pace since January,” notes Realtor.com Chief Economist Danielle Hale in her analysis.

For the week ending Sept. 10, the number of new home sellers putting their properties on the market dropped by 13% compared with this same week last year. That’s the 10th straight week of year-over-year declines, and a double-digit drop at that.

Clearly, “sellers are less optimistic about conditions compared to a year ago, which is a likely factor behind the scarcer new listings trend,” says Hale.

PB Topical Ref