Investing.com – Home prices should fall faster in 2023, according to Citi analysts.
Their comments come after the housing price index showed that home prices in the US remained unchanged in October on a monthly basis while analysts had expected a 0.8% increase. Elsewhere, the S&P/Case-Shiller Home Price Index was reported at 8.6% yoy in October, missing the analyst consensus of 10.4%.-
Based on the FHFA Home Price Index, Citi analysts note that the South Atlantic and East South Central region posted the largest increases in home prices, although they are down about 20% from peak levels earlier this year.--
“Data is somewhat lagging and we expect continued pressure in the November/December data (which will be released in January/February) reflecting higher mortgage rates; more real-time rate data from Redfin and Realtor.com suggesting rates fell by -2% MoM in November and somewhat flat in December at (-0-1% MoM),” Citi analysts said in a note to clients.
They see home prices slowing year-on-year for the remainder of 2022, and they expect new home prices to fall 12% from peak levels in 2022 next year.