Housing affordability is worsening due to higher mortgage rates, which is prompting a slowdown for what home sellers are able to get for their home. The U.S. median home price rose 4.8 percent in the third quarter, the slowest rate of annual appreciation since the second quarter of 2016, according to a new report released by ATTOM Data Solutions, a real estate data firm.
“The continued slowdown in the rate of home price appreciation nationwide and in many local markets is a rational response to worsening home affordability—which has deteriorated at an accelerated pace this year due to rising mortgage rates,” says Daren Blomquist, senior vice president at ATTOM Data Solutions. “Markets not experiencing this price appreciation cool down may have more of an affordability cushion to work with, but some are in danger of overheating if home price gains continue to run hot.”
Rates of home appreciation slowed in 74 of the 150 metro areas that ATTOM tracks, including Los Angeles, Chicago, Dallas-Fort Worth, Houston, and Miami—which all posted single-digit percentage gains in median home prices compared to a year ago.