The pandemic housing market rally, a bright spot for the U.S. economy, may already have peaked as the growth in home prices starts to slow.
The asking price for a typical single-family home jumped 13.8% last from a year earlier, according to an index from Haus, an investment platform for homebuyers. That was down from a peak of 16.5% growth in late July.
“The rate of growth was unsustainable,” said Ralph McLaughlin, chief economist at Haus.
The Covid-19 pandemic, after causing buyers to pause when lockdowns began in March, fueled a buying frenzy in 2020. Borrowing costs fell to record lows and Americans decided to upgrade to bigger homes in the suburbs or follow their dreams to mountain towns out West. But in the new year, real estate analysts are watching for a slowdown.
Rates for 30-year loans, below 3% since July, are unlikely to fall significantly from here. And with homes to buy in short supply, buyers will inevitably be squeezed out of the market.
The Common Haus Price Index, designed to be a leading indicator, uses asking prices rather than closed sales to measure the value of a typical U.S. home. It includes eight weeks of data, though it weighs the most recent week most heavily.
