A CoreLogic report said home prices and sales fell as demand cooled from all buyers, including investors and those interested in building homes.
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Home prices in some U.S. metropolitan areas have fallen sharply due to higher mortgage rates, a report says.
Although CoreLogic reported last week that overall house prices rose 4.9% year-on-year in May, the five markets painted a different picture.
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Five U.S. metropolitan areas saw year-over-year declines in home prices in May, including Austin, Texas; San Francisco; New Orleans; Cape Coral, Florida; and North Port, Florida.
In these markets, home prices and sales declined as buyer demand, including from investors and buyers interested in building homes, cooled. High mortgage rates during the traditional hot spring sales season create an imbalance between buyers and sellers and have a chilling effect on home prices.
Austin led the way with a 3.5% decline, while San Francisco, known for its high housing prices, followed with a 2.6% decline. New Orleans home prices fell 0.9%.
Prices also fell in two Florida cities, with Cape Coral down 0.6% and North Port down 0.2%.
according to new york postIn the spring, mortgage rates spiked to about 7% for a 30-year fixed-rate loan, hurting the market. Home prices also fell in May in 16 of the 100 largest cities, including El Paso, Texas; Gary, Indiana; and Buffalo, New York.
On the other hand, 34% of homes sold for more than asking price in June, a significant increase from the pre-pandemic average of 23%, driven by strong demand in a market characterized by high prices and low inventory.
About 100,000 borrowers are six months or more past due on their mortgages, a situation not seen since the 2009 financial crisis, according to CoreLogic. Mortgage rates fell to 0.2%.
However, many borrowers in the final stages of delinquency bounced back and avoided foreclosure.
ARM’s share of total outstanding loans and outstanding conventional mortgages has reached 5%. There was an influx of ARM projects in the aftermath of the financial crisis, with ARMs accounting for nearly 20% of outstanding mortgages, but the coronavirus pandemic has reduced this proportion to a low of 4%.
The appraisal gap for homes under contract has returned to pre-pandemic levels, with homes assessed at 8.6% below their value in June, down from 10.7% last year. According to CoreLogic, there is a wider assessment gap for new homes, which may reflect the higher likelihood of inexperienced first-time buyers overpaying.
New home sales in the first half of this year fell 17% compared with the same period last year. Among the top 30 metropolitan areas in the United States, Portland, Oregon and Las Vegas were the only metropolitan areas to see growth in the number of new homes this year, at a rate of 2%.
In June, investors accounted for 23% of all single-family homes purchased, down 5 percentage points from January and the lowest investor share in two years.
While existing home sales were down 19% year-over-year, pending home sales improved in June, rising 9% from last year, suggesting the market may be recovering.
Email Richelle Hamill
