Local housing prices in the US fell the most since 2009 – Press Telegram

A sudden reversal in the housing market is pushing prices to their highest levels since the Great Recession.

The widely watched Case-Shiller indexes in Los Angeles and Orange counties and the nation saw their biggest one-month drop since 2009 in August.

For the month, the LA-OC index fell 2.25%, the 10th biggest drop in Case-Shiller history, dating back to 1987. The index fell 1.62% in the previous month, falling #17.

The housing market has begun to fall as the Federal Reserve raises interest rates to curb the hottest inflation in decades. Even with the slowdown, prices in many cities remain high compared to last year. Coupled with mortgage rates approaching 7%, many potential buyers have been turned off and some sellers have backed out.

Case-Shiller indices are known to be slow benchmarks. These figures reflect long-term changes in single-family home sales prices for the three months ending in August.

Over the 12 months, the LA-OC index rose 12.1%, well below the pandemic high of 23.4% set earlier this year. That means the index is 4.3% below its all-time high, but still 39% higher than in February 2020, just before the coronavirus turned the economy upside down.

Although prices are still rising year over year, they are cooling rapidly. LA-OC’s 12-month gain was 3.6 points below July’s 15.7% gain, tying July for the biggest cooldown in inflation since 1987.

Prices in 20 major US cities fell 1.3% in August from the previous month, the most since March 2009. Prices rose by 13% in August from 15.6% in August last year. % growth in July, the largest slowdown in the index’s history.