By Mike Sunnucks | Rose Law Group Reporter
U.S. home prices grew by 18.3% in June from a year ago and prices in Phoenix are 26.1% — but higher interest rates and economic jitters are taking the steam out of real estate markets.
That is according to the latest CoreLogic Home Price Index for June.
CoreLogic expects higher interest rates and a slowing economy to take year-over-year home price appreciation down to 4.3% by June 2023.
“Signs of a broader slowdown in the housing market are evident, as home price growth decelerated for the second consecutive month,” said Selma Hepp, interim lead of the office of the chief economist at CoreLogic. “This is in line with our previous expectations and given the notable cooling of buyer demand due to higher mortgage rates and the resulting increased cost of homeownership. Nevertheless, buyers remain interested, which is keeping the market competitive — particularly for attractive homes that are properly priced.”
CoreLogic reported home prices increased by 0.6% from May 2022 to June 2022.
Tampa had the highest year-over-year gains among the largest U.S. markets with a 32.6% jump in June. Phoenix (26.1%) is second. The two Sunbelt markets have shown the strongest recent price gains though that trend is slowing.
Among U.S. states, Florida (31.8%), Tennessee (25.8%) and Arizona (24.9%).
The Federal Reserve Bank has raised interest rates 150 basis points so far this year to try to put a dent into high inflation rates. The economy has also seen two consecutive quarters of negative growth (-1.6% and -0.9% in Q1 and Q2).