That’s how many consecutive months home prices have been at least 10% higher than they were a year earlier, but analysts say the red hot housing market may soon cool off.
Home prices in May 2022 were 20.2% higher than in the same month of 2021 and 1.8% higher than in April, according to the monthly CoreLogic Case-Shiller Home Price Index. However, there were some signs of a slowdown in the numbers, as the year-over-year increase wasn’t as large as April’s 20.4%, the biggest yearly jump in the index’s history.
The slight slowdown in home price growth came as mortgage rates reached their highest levels since 2008, a result of the Federal Reserve’s efforts to rein in inflation by hiking its benchmark interest rate, the fed funds rate. While home prices will continue to rise, the rate will be only 5% by May 2023, according to CoreLogic. With mortgage rates about 50% higher than they were a few months ago, buyers are being pushed out of the market, which should lead to a rapid deceleration in price growth, CoreLogic Deputy Chief Economist Selma Hepp said in a statement.
“The normalization of overheated buying conditions should bring about more of a balance between buyers and sellers and a healthier overall housing market,” Hepp said.
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