The rise in U.S. home prices slowed for the fifth consecutive month in November 2022.

U.S. home prices increased 7.7% year over year in November 2022, lower than the index's annual increase of 9.2% a month earlier, according to the S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index. Potential buyers are constrained due to economic weakness and the prospects of recession.

"Given these prospects for a challenging macroeconomic environment, home prices may well continue to weaken," S&P Dow Jones Indices Managing Director Craig Lazzara said.

Deceleration continues in top cities; Miami fares better

The downward trend was seen in every state covered in the 20-City Composite Index, which posted a year-over-year increase of 6.8% in November 2022, compared to 8.6% in the previous month.

The 10-City Composite Index increased 6.3% year over year, down from an 8.0% rise in October 2022.

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Miami continued to lead the way as the biggest gainer, recording an annual home price increase of 18.4%. Fellow Florida city Tampa was second on the list with a 16.9% year-over-year price increase.

Atlanta narrowly edged past Charlotte, N.C., to take the third spot with a 12.7% increase in home prices during November 2022. Charlotte logged a 12.6% rise.

Select homebuilder stocks turn positive; mortgage lenders trim holdings

Taylor Morrison Home Corp., D.R. Horton Inc., M/I Homes Inc., Lennar Corp. and Meritage Homes Corp. have been among the top-performing homebuilding stocks, posting positive one-year total returns even as the median one-year total return for the industry was a negative 7.2% as of Jan. 30.

Taylor Morrison was the top performer among its peers, recording a one-year total return of 12.6%. D.R Horton and M/I Homes were the only other homebuilder stocks to post double-digit one-year total returns through Jan. 30.

Among the top five performing homebuilders, Lennar reported the highest year-over-year increase in the number of homes sold in the one year-period ended Nov. 30, 2022. The company sold 66,225 homes in that period, a 10.9% year-over-year rise.

As of the end of October 2022, residential mortgages originated in the U.S. had slumped 34.6% year over year to $2.592 trillion.

First Republic Bank and PNC Financial Services Group Inc. were the only big lenders to record year-over-year increases in residential mortgage originations.

First Republic's mortgage loan originations increased 17.6% to $26.75 billion through the end of October 2022, while PNC Financial posted an increase of 5.3% to $24.86 billion.

New single-family home sales in the U.S. increased 2.3% on a monthly basis to a seasonally adjusted annual rate of 616,000 units in December 2022, according to data from the U.S. Census Bureau and the U.S. Department of Housing and Urban Development. However, new home sales declined 26.6% on an annual basis.

Existing home sales fell month over month and year over year in December 2022, declining 1.5% from the previous month and 34.0% from a year ago.

The higher mortgage rates and limited inventory made December 2022 a difficult month for homebuyers, National Association of Realtors Chief Economist Lawrence Yun said in a Jan. 20 news release. However, buyers who prefer to buy with cash and are not affected by mortgage rates have been able to take advantage of lower prices seen in some parts of the country, according to Yun.

Yun expects home sales to pick up soon as mortgage rates notably dropped after peaking in late 2022.