Home prices in the United States gained in the latest reading of the leading index but the pace of growth eased.
The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine US census divisions, reported a 5.2% annual gain in November, down from 5.3% in the previous month.
Meanwhile, the The 10-City Composite annual increase came in at 4.3%, down from 4.7% in the previous month and the 20-City Composite posted a 4.7% year-over-year gain, down from 5.0% in the previous month.
“Home prices are still rising, but more slowly than in recent months,” says David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices. “The pace of price increases are being dampened by declining sales of existing homes and weaker affordability.
Sales eased in 2018 with affordability challenged by higher prices and increased mortgage rates through much of last year. Following a shift in Fed policy in December, mortgage rates backed off to about 4.45% from 4.95%.
“Housing market conditions are mixed while analysts’ comments express concerns that housing is weakening and could affect the broader economy,” added Blitzer. “Current low inventories of homes for sale – about a four-month supply – are supporting home prices. New home construction trends, like sales of existing homes, peaked in late 2017 and are flat to down since then. Stable 2% inflation, continued employment growth, and rising wages are all favorable. Measures of consumer debt and debt service do not suggest any immediate problems.”
