Real estate prices in the U.S. fell again in September as mortgages weakened demand

On Tuesday, survey results showing that demand for buying real estate in the U.S. fell sharply due to higher mortgage rates was released. As a consequence, since the beginning of September prices for houses continued to decrease.

In September, the S&P CoreLogic Case Shiller National Home Price Index fall was 0.8% compared to August. In July, monthly housing prices fell for the first time since late 2018. On an annualized basis, home prices increased by 12.9% in August and by 10.6% in September.

The aggressive interest rate rise by the Federal Reserve System is needed to hold inflation down by reducing demand in the economy. It had a negative effect on the real estate market.

Freddie Mac Mortgage Financing Agency data show that the 30-year fixed mortgage rate fell to an average level of 6.58% last week. Recall that in October this rate exceeded 7% for the first time since 2002. In any case, the average rate of 3.10% for the same period last year remains much lower.

Craig Lazzara, managing director of S&P DJI said that housing remains less available because of mortgage financing, which is becoming more expensive as a result of the FRC's interest rate increases. He added that real estate prices may continue to fall under the influence of the continued perspective of a difficult macroeconomic situation.