As one of the leading measures of nationwide home prices, the S&P Dow Jones Indices has released its latest S&P CoreLogic Case-Shiller Indices for December 2022.
Overall, the report shows that home price gains continued to retreat over the month with holdout cities such as San Francisco and Seattle reporting drops as well.
On a yearly basis the report found that the annual price gains in December was 5.8% over November’s 7.6%.
Miami, Tampa, and Atlanta reported the highest year-over-year gains among the 20 cities in December. Miami led the way with a 15.9% year-over-year price increase, followed by Tampa in second with a 13.9% increase, and Atlanta in third with a 10.4% increase. All 20 cities reported lower prices in the year ending December 2022 versus the year ending November 2022.
After seasonal adjustment, the U.S. National Index posted a month-over-month decrease of -0.3%.
“The cooling in home prices that began in June 2022 continued through year end, as December marked the sixth consecutive month of declines for our National Composite Index,” says Craig J. Lazzara, Managing Director at S&P DJI. “The National Composite declined by -0.8% in December, and now stands 4.4% below its June peak. For 2022 as a whole, the National Composite rose by 5.8%, the 15th best performance in our 35-year history, although obviously well below 2021’s record-setting 18.9% gain. We could record similar observations in the 10- and 20-City Composites.
“Prices fell in all 20 cities in December, with a median decline of -1.1%. Moreover, for all 20 cities, year-over-year gains in December (median 4.4%) were lower than those of November (median 6.4%). We noted last month that home prices in San Francisco had fallen on a year-over-year basis. San Francisco’s decline worsened in December (-4.2% year-over-year); its west coast neighbors Seattle (-1.8%) and Portland (+1.1%) once again form the bottom of the league table.
“As was the case last month, December’s best performers were all in the Southeast, with Miami (+15.9%) in the lead for the fifth straight month. Tampa (+13.9%) and Atlanta (+10.4%) continued in second and third place, with Charlotte (+9.9%) not far behind. Unsurprisingly, the Southeast (+12.5%) and South (+11.6%) were the strongest regions, and the West (+1.2%) continuing as the weakest.
“The prospect of stable, or higher, interest rates means that mortgage financing remains a headwind for home prices, while economic weakness, including the possibility of a recession, may also constrain potential buyers,” Lazzara concluded. “Given these prospects for a challenging macroeconomic environment, home prices may well continue to weaken.”
Selma Hepp, CoreLogic’s Chief Economist, also commented on factors influencing present home prices:
“Housing markets continued to face rapidly cooling conditions this winter. Home prices followed along with home price gains slowing by almost 15 percentage points since the spring and reaching some of the slowest rates of increase since the fall of 2020,” Hepp commented. “Nevertheless, even with price cooling, home prices nationally were only down about 4% by December from the spring peak. And while fallen mortgage rates offered some early signs of optimism for the upcoming spring home buying season, persistent inflation is proving challenging and may lead to higher mortgage rates during the spring months.”
Click here to see the report in its entirety.