Rising Mortgages Rates a Worldwide Issue


It’s not just the U.S. raising interest rates. Most world countries are also trying to ward off a recession, and home prices in a few areas have even started to decline.

NEW YORK – Rising interest rates are impacting residential real estate markets worldwide, with home values in some areas on the decline.

The United States, however, continues to see strong house-price growth despite higher mortgage rates, as robust buyer competition continues to surpass limited seller supply.

Average U.S. home prices increased by an annual 20.4% in April, according to the S&P CoreLogic Case-Shiller National Home Price Index, and Federal Reserve officials have expressed a willingness to curb U.S. inflation even if it results in a recession.

An index of global house prices by real estate consulting firm Knight Frank reveals similar prices home-price gains with a 19% increase between the first quarter of 2020 and the first quarter of 2022, or 10% after adjusting for inflation. And some markets experienced stronger appreciation.

The index found that inflation-adjusted price growth slowed to 3.9% globally in the first three months of 2022 from a year earlier. Over the same period, house prices fell in real terms in countries including Brazil, Chile, Spain, Finland, South Africa and India, according to Knight Frank research.

With Canada mortgage rates at their highest level since 2009, house sales in June were down 24% in that country from a year earlier, according to the Canadian Real Estate Association.

Source: Wall Street Journal (07/18/22) Douglas, Jason; Vieira, Paul; Wright, Stephen

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