Rising mortgage rates are helping decelerate home price growth, which is expected to slow further during the coming year, according to CoreLogic. Consumer uncertainty in the economy due to stock market declines may also weaken house values.
Home prices rose 5.1% year-over-year and 0.4%
"The rise in mortgage rates has dampened buyer demand and slowed home-price growth. Interest rates for new 30-year fixed-rate loans averaged 4.9% during November, the highest monthly average since February 2011," said Frank Nothaft, chief economist at CoreLogic, in a press release. "These higher rates and home prices have reduced buyer affordability. Home sellers are responding by lowering their asking price, which is reflected in the slowing growth of the CoreLogic Home Price Index."
Because a healthy economy boosts homeowner confidence in the values of their properties, a falling stock market could also signal slower house price appreciation, according to CoreLogic President and CEO Frank Martell.
"If recent declines in the stock market shakes consumer confidence in the national economy, we may see homeowners’ perception of home value change and a subsequent buyers’ market emerge in 2019," said Martell.
While property value growth is slowing, prices are still on the rise. Of the nation's top 50 metropolitan areas based on housing stock, 44% were considered overvalued in November, meaning house values were at least 10% above the long-term, sustainable level in a given market.
Homeowners cited desirable location and an improved national and local economy as the top reasons their property's worth is increasing.
