US home price growth slows to 18%

“Nevertheless, the rebalancing of buyer and seller expectations was inevitable after overheated and unsustainable demand and price growth, followed by a surge in mortgage rates and consequent constraints on affordability. Thus, cooling of price acceleration, as well as demand, will yield a healthier and more balanced housing market going forward.”   

Craig Lazzara, managing director at S&P DJI, noted that deceleration and decline are two entirely different things and that prices are still rising at a robust rate.

According to the National Association of Realtors, the median home sales price hit a record high of $413,800 in June before dipping to $403,800 in July. Existing-home sales price in July was also roughly 11% higher than a year ago.

Still, industry experts expect home price growth to slow considerably in the coming quarter. Goldman Sachs chief economist Jan Hatzius forecasted home price appreciation to stall completely, averaging 0% in 2023.

“While outright declines in national home prices are possible and appear quite likely for some regions, large declines seem unlikely,” Hatzius said.