The pace of home price appreciation in San Diego slowed in June, making it the third-slowest market in the country, according to S&P Case-Shiller indices released Tuesday.
While home prices in the San Diego metro area rose 21.6 percent year over year in June, that figure is down from 30 percent in March.
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Experts blame rising interest rates for the biggest declines in more expensive markets, especially on the West Coast.
Seattle had the biggest drop, 1.5 percent, from May to June. It was followed by San Francisco, down 0.8 percent, and San Diego, down 0.6 percent.
On the other hand, Florida and parts of the South are now among the leaders in rising prices. Tampa had the fastest annual increase in home prices at 35 percent, followed by Miami at 33 percent and Dallas at 28.2 percent.
Prices in the San Diego metro area, which includes all of San Diego County, rose eighth in the 20-city index. It’s down from the height of the pandemic when San Diego was among the top three accelerating markets for 13 months.
Zillow economist Nicole Bachaud said mortgage rates hurt homebuyers’ purchasing power, lowered affordability and led to homes staying on the market longer.
“While these are the first steps toward a more balanced market in the long run,” he wrote in an analysis, “these slowdowns in home value appreciation will take a while before they have a significant impact on buyers.”
The median price of a single-family resale home was $931,000 in June, still close to a record high of $950,000 in April. Case-Shiller indices take into account repeat sales of identical single-family homes, and are seasonally adjusted as they change over the years. The index typically has a lag of about two months and uses a three-month moving average.
Bachaud said that even if markets experience some price slowdown, it will be a long time before buyers see a significant price reduction. She said the increase in the number of homes for sale will reduce competition and lower prices, but there are already signs that inventory isn’t going up much. In recent weeks, the number of homes for sale in San Diego County has begun to decline, after growing for much of the year.
The interest rate for a 30-year fixed-rate mortgage was 5.52 percent in June, reported freddy mac, compared to 2.87 percent the previous year. The rate is well above the December 2020 average of 2.68 percent, which was the lowest on record since 1971.
CoreLogic Deputy Chief Economist Selma Hepp said June’s 18 percent national increase marked the third-slowest month of home price growth. She said the housing market may also be affected by potential buyers’ fear that the market will cool off.
“Housing market activity has cooled markedly since the mortgage rate hike in June,” he wrote, “prompting a widespread slowdown in home price growth and heightened concern about potential declines in home prices.” homes in the future.
The metro areas with the lowest earnings were still in the double digits. Minneapolis was the lowest at 10.4 percent, followed by Washington, DC at 10.8 percent and Cleveland at 12.8 percent.
Craig J. Lazzara, managing director of S&P Dow Jones Indices, wrote in the June report that the Federal Reserve’s efforts to curb inflation by raising interest rates may affect the nation’s domestic market for the rest of the year. year.
“As the macroeconomic environment continues to be challenging,” he wrote, “home prices may well continue to slow.”
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S&P Case-Shiller Indices
Annual price growth by metropolitan area
Tampa: 35 percent
Miami: 33 percent
Dallas: 28.2 percent
Phoenix: 26.6 percent
Charlotte: 25.5 percent
Las Vegas: 25.1 percent
Atlanta: 24.8 percent
San Diego: 21.6 percent
Denver: 19.3 percent
Los Angeles: 19.3 percent
Seattle: 19.2 percent
San Francisco: 16.1 percent
Boston: 14.9 percent
Portland: 14.7 percent
New York: 14.6 percent
Detroit: 13.2 percent
Chicago: 13.1 percent
Cleveland: 12.8 percent
Washington: 10.8 percent
Minneapolis: 10.4 percent
Nationwide: 18 percent