The prices of homes in Dallas grew at a decelerated pace in December.
The latest results from the S&P CoreLogic Case-Shiller Indices were released Tuesday, showing that U.S. home price gains continued to drop in December, with growth in Dallas’ market moderating back to pre-pandemic levels.
The Case-Shiller National Home Price (NSA) Index is a trailing three-month indicator that measures the change in single-family home value each month. The index covers nine major U.S. markets and is the leading measure of U.S. residential real estate prices nationally.
“The cooling in home prices that began in June 2022 continued through year-end, as December marked the sixth consecutive month of declines for our National Composite Index,” said Craig J. Lazzara, managing director at S&P DJI.
In terms of the local housing market, index data shows that home prices in Dallas fell 1.1% from November to December, slightly higher than the 0.8% average decrease nationally. Following Dallas’ double-digit home price growth over the past two years, the city finally managed to return to single-digit percentage growth in December, driving year-over-year growth of 7.9%, according to the index.
With economic headwinds pummeling the real estate market nationally, the cooldown in prices is a natural response to the reduction in demand and buying activity, according to Lazzara.
“The prospect of stable, or higher, interest rates means that mortgage financing remains a headwind for home prices, while economic weakness, including the possibility of a recession, may also constrain potential buyers,” said Lazzara.” Given these prospects for a challenging macroeconomic environment, home prices may well continue to weaken.”
Home prices in December fell in all 20 cities that are tracked by the index. Moreover, year-over-year gains in December for all 20 cities dropped from 6.4% in November to 4.4% the following month.
San Francisco (-4.2%), Seattle (-1.8%), and Portland (+1.1%) had the worst year-over-year performance and once again formed the bottom of the index’s charts.
In December, the country’s best-performing markets were centered around the South and Southeast regions of the U.S. Miami, for instance, led in home price gains for the fifth straight month with a 15.9% annual increase. Tampa and Atlanta took the second and third place spots with increases of 13.9% and 10.4%, respectively. The Western region of the U.S. had the weakest performance.
Rising mortgage rates, high inflation, and other economic pressures throughout 2022 contributed to the country-wide decline in home price growth, according to Zillow Senior Economist Nicole Bachaud.
“Buyers and sellers ended the year on a discouraging note, with sales declining as mortgage rates soared, new listings sputtered out, and active inventory pooled up as homes stayed on the market longer,” said Bachaud in a statement reported by The Dallas Morning News.