Americans are finding it hard to afford homes at mortgage levels now beyond 7%, according to some measures. Home prices have begun to reflect that. As mortgage rates rose in the last quarter of 2022, Americans found the cost of homeownership increasingly challenging, adding hundreds of dollars in interest to their potential monthly mortgage payment. Yet home prices held steady, given how few homes were on the market.
But months of high mortgage rates and a drop in home sales are finally impacting home prices. Single-family home prices slid 1% in January, as compared to December 2022, according to data from Moody’s Analytics. “The U.S. housing market is crumbling under the weight of higher mortgage rates and rock-bottom affordability,” Matthew Walsh, Moody’s Analytics housing economist, said. Alaska had the biggest decline in month-over-month prices. Home prices fell by 4.9% in January. New Mexico and Wyoming followed, with a 3.8% decline. Mississippi took the next spot with home prices dropping 3.7% in January as compared to the month before. However, it wasn’t all bad news. House prices also rose month-over-month in Indiana, by 2.2%, West Virginia, by 1.1% and Vermont by 1%. But looking at prices year-over-year, the West Coast is leading the drop, Moody’s Analytics said, with California, Nevada and Washington reporting values below what they saw in 2022. The median price of an existing home was $359,000 …