Home prices fell in August for the second straight month, according to data from Black Knight. Median prices fell 0.98% in August, following July’s upwardly revised 1.05% monthly decline. They mark the biggest single-month price declines since January 2009 and are among the eight largest on record. Loading Something is loading.
Home prices fell in August for the second straight month and at a pace not seen since the Great Financial Crisis, according to data from Black Knight.
Median rices fell 0.98% in August, a slightly lower decline compared to July’s upwardly revised 1.05% fall. July and August mark the biggest single-month price declines since January 2009 and are among the eight largest on record.
“The only months with materially higher single-month price declines than we’ve seen in July and August were in the winter of 2008, following the Lehman Brothers bankruptcy and subsequent financial crisis,” said Ben Graboske, Black Knight data and analytics president.
Housing inventories are stalling and sellers have become turned off by a market hard hit by rising mortgage rates that are deterring buyers.
Mortgage rates have climbed to the highest levels since 2008, spurred by a hawkish Federal Reserve trying to tame inflation. The result has been a swift cooling of a scorching housing market that took off during the height of the Covid-19 pandemic.
“Historically low inventory – along with record low interest rates – was one of the key drivers behind US home prices seeing essentially a decade’s worth of appreciation in just two-and-a-half years,” Graboske said.
He added that current sellers “have a growing disincentive to give up their own historically low-rate mortgages in this environment. Some may be waiting out the market to see if demand – and prices – return in the spring.”
And buying a new home is still out of reach to many as mortgage rates continue and the payment-to-income ratio continue to climb. Black Knight said the payment-to-income ratio already hit a record 34.3% in June.
“The situation is geographically widespread as well, with 84 of the 100 largest US markets now at more than three-decade lows in terms of home affordability,” Graboske said.