US home prices in February posted their first year-over-year decline in more than a decade as surging mortgage rates put the squeeze on the market.
The average US home sold for $350,246 for the four weeks ending on Feb. 26, according to an analysis by real estate firm Redfin this week. The sale price plunged by 0.6% compared to the same month one year ago — the first annual decline since February 2012.
“Prices falling from a year ago is a milestone because it hasn’t happened since the housing market was recovering from the 2008 subprime mortgage crisis,” Redfin deputy chief economist Taylor Marr said in a statement.
“Home prices skyrocketed so much over the last few years that they were likely to come down once rates rose from historic lows,” Marr added.
Mortgage rates have jumped again in recent weeks as worse-than-expected inflation reports sparked fear that the Federal Reserve will continue hiking interest rates. The average 30-year mortgage rate rose steadily throughout the month of February and hit a whopping 7.1% as of this week.