Homes in the south suburban Chicago area on April 26, 2023.Brian Cassella | Tribune News Service | Getty ImagesA home is most Americans’ single largest investment. The returns are losing ground. Home prices nationally rose 1.5% in August compared with the same month last year, down from the 1.6% annual gain recorded in July, according to the S&P Cotality Case-Shiller U.S. National Home Price NSA Index. While home prices aren’t yet falling, they’re weakening — rising at a slower pace than the current 3% rate of inflation. That means that housing wealth eroded in real terms for the fourth consecutive month, according to the index. Home prices in nearly all of the metropolitan markets highlighted in the index fell month to month in August. Only Chicago saw price gains. Home prices are seasonal and usually drop this time of year, but this weakness was more significant than typical seasonal patterns.Much of that is due to stubbornly high mortgage rates, which stagnated over the summer, when much of this index was measured. (The index is a 3-month running average). Rates have since declined, but not by a lot. The average rate on the 30-year fixed mortgage started June at just below 7% and fell to 6.5% by the end of August, according to Mortgage News Daily. It is now at 6.19%.”Mortgage rates remaining above 6.5% continue to weigh on buyer demand, even during what should be the busy summer season. The combination of high financing costs and prices that remain near record highs has limited transaction activity,” wrote Nicholas Godec, head of fixed income tradables and commodities at S&P Dow Jones Indices, in a news release.August prices rose the most in the New York metropolitan area, with a 6.1% annual gain, followed by Chicago at 5.9% and Cleveland at 4.7 …
