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Illustration by Lanette Behiry/Real Estate News

Home prices, sales off in November amid higher mortgage rates 

The S&P CoreLogic Case-Shiller Index for November showed a monthly drop in home prices as buyers retreated in response to rate hikes, affordability concerns.

January 31, 2023
3 minutes

Key points:

  • Home prices edged lower across the U.S. in November as mortgage rates increased.
  • Homebuyers “took a bigger step back from the market” at the end of 2022, said George Ratiu, senior economist with
  • In January, mortgage rates trended downward, bringing more buyers back to the market.

Monthly home prices declined across the U.S. in November as a slowdown in sales continued, according to the S&P CoreLogic Case-Shiller Index

Case-Shiller's index for November showed a drop in home prices for the fifth straight month. The housing price composite index for 20 cities was off by .5% month over month, a slight dip that economists expected. 

Higher interest rates and economic uncertainty sidelined buyers and caused sellers to rethink pricing strategies, said George Ratiu, senior economist with

"Today's S&P CoreLogic Case-Shiller Index showcases the slowdown in housing transactions toward the tail end of 2022, as homebuyers worn tired by the relentless surge in mortgage rates took a bigger step back from the market," Ratiu said.

"The home price data released do not account for the full impact of rising mortgage rates, which were above 7% early in November, and led to a significant pullback in buyer activity," said Dr. Lisa Sturtevant, chief economist at Bright MLS. 

"In many local markets across the country, home prices have fallen precipitously from their summer peaks as buyers were forced out of the market due to affordability challenges," Sturtevant said.

Ratiu noted that mortgage rates fell in January and real estate transactions are picking up across the country, but he cautioned that buyers are not likely to see rate drops to continue with any significance, at least in the next several weeks.

The Federal Reserve, which is meeting today and Wednesday, is expected to move the overall interest rate higher but at a more moderate pace, as inflation has started to slow. While the Fed does not control mortgage rates, higher interest rates for home loans tend to follow the Fed's rate hikes.

Year-over-year look

Higher mortgage rates in 2022 led to home prices rising at a much slower pace over 2021, according to Case-Shiller. 

The national index posted a 9.2% yearly gain in November, down from 10.7% in October. By comparison, year-over-year gains were 20.6% higher in March 2022 — just prior to the Fed's initial interest rate hike in 2022 to curb inflation in the economy.

Home prices in all 20 cities in the Case-Shiller index rose at a slower pace in November 2022 from November 2021. Cities in the Southeast — including Miami, Tampa and Atlanta — posted the biggest price increases. 

Miami led annual price gains, with an 18.4% price increase, followed by Tampa with a 16.9% increase, and Atlanta with a 12.7% increase. All 20 cities had lower price increases for the year that ended November 2022 over October 2022.

The index — which covers the nation's nine census regions — showed a 7.7% annual increase in U.S. home prices in November, a drop from 9.2% the previous month.

The index's 20-city composite had a 6.8% annual gain, down from 8.6% the previous month.

"Despite the slowdown in price appreciation, talk about a major market correction is just hyperbole," Sturtevant said. She predicted that "we may have already seen the bottom of the housing market."

With mortgage rates declining through January, more buyers are shopping for properties and making offers, she said. "Many agents and brokers are expecting a robust spring housing market, and the overall mood in the market feels much more optimistic than even a month ago," Sturtevant said.

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