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Case-Shiller: Home Price Growth Slows in November S&P Case-Shiller Home Price Indices reported slower home price growth in November. Rising mortgage rates and high home prices sidelined first-time and moderate-income buyers and investors who fear buying at the peak of today’s housing markets only to face lower home values when home prices cool off.

November’s National Home Price Index reported a year-over-year gain of 18.80 percent in home prices year-over-year. The 20-City Home Price Index, which, real estate pros frequently use to estimate home pricing trends, reported that U.S. home prices rose 18.30 percent year-over-year in November.

20-City Home Price Index: Arizona and Florida Post Top Gains in Home Prices

Home prices in the Phoenix, Arizona metro area rose by 32.2 percent year-over-year in November. Tampa, Florida followed with year-over-year home price growth of 29.0 percent. Miami, Florida held third place in the Case-Shiller 20-City Home Price Index with year-over-year home price growth of 26.6 percent.

The covid pandemic influenced home buying trends in multiple ways. Closures of workspaces, loss of childcare options and local restrictions and regulations designed to prevent the spread of covid caused many people to seek alternatives to commuting to work. Working from home allowed homeowners to transition from daily commutes to work to buying bigger homes to accommodate changing family and work needs.

Covid influenced many home buyers to look for homes in less-congested metro areas; Metro areas in the mountain west have grown as buyers from congested coastal metro areas bought homes in less populated areas in states including Arizona, Colorado, and Idaho.

Rising Home Prices and Mortgage Rates Impact Affordability

Rapidly rising home prices, buyer competition, and higher mortgage rates continued to challenge first-time and moderate-income home buyers, but demand for homes remains high. Analysts expect high demand and short supplies of available homes will continue to dominate housing markets in 2022.

The Naples, Florida metro area held first place in a survey of emerging housing markets; the North-Port, Sarasota, and Bradenton, Florida metro areas held second place in emerging markets. International buyers and vacation rentals are driving home sales as covid-related travel restrictions are lifted.

Metro areas including Raleigh, North Carolina, and Fort Wayne, Indiana held their own among popular vacation destinations. Foreign-born home buyers are returning to U.S. housing markets from covid-related travel restrictions. Danielle Hale, the chief economist at Realtor.com, said: “The idea that people are traveling more and that borders are a little bit more open than they were gives international buyers the confidence to get [into the housing market.] We do see an increase in international shopping within a lot of these areas.”

Emerging real estate markets and recovery of formerly stable housing markets indicate that the worst effects of the pandemic are easing but the quick spread of covid’s omicron variant suggests that complete economic recovery from the pandemic is a gradual process.

Why Purchasing A House In 2022 Is Smart Despite Inflation Anyone who has paid attention to the news has likely noticed that inflation is a constant headline. Inflation takes place when the average cost of goods and services begins to rise. There are a number of reasons why inflation has been rising at record rates during 2021 and 2022.

The federal government has pumped money into the economy, and supply chain constraints have led to a shortage of goods. This means that everything from cars to groceries has gotten more expensive. Many individuals and families are looking for ways to save money, and this might mean putting off homeownership dreams. Even though housing prices have gotten more expensive as well, inflation should not stop someone from trying to buy a house in 2022.

Owning A Home Offers Financial Security

One of the biggest reasons why people should consider buying a house in 2022 is that owning a home offers financial security. Those who lock in a fixed-rate mortgage could pay the same mortgage premium for decades. Even though it is possible that real estate taxes and home insurance rates could rise, the mortgage payment will stay the same. Individuals who stay in their houses for 30 years might see their income go up as they get promoted at work. This means that they will have more money to put elsewhere with a consistent mortgage payment.

Those who put off owning a home could see their rents go up every year. Many apartment complexes and landlords raise the rent consistently to keep up with rising inflation. Becoming a homeowner simply offers more financial security.

Owning A Home Acts As A Hedge Against Inflation

When inflation goes up, the average value of a single dollar goes down. It is critical for everyone to think about how they can hedge this risk, which means putting their money where it is unlikely to lose value. Putting that money in a home is a great decision. Because housing prices could increase, the value of the money in that house will go up as well. Furthermore, with interest rates on mortgages extremely low, buying a house becomes an even better inflation hedge. The best way to combat inflation is to have a fixed expense, such as a mortgage payment.

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