The S&P CoreLogic Case-Shiller Indices showed that the rate of home-price increases across the U.S. had continued to slow in November.
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Blitzer: Low inventories are supporting home prices.[/caption]
“Home prices are still rising, but more slowly than in recent months. The pace of price increases are being dampened by declining sales of existing homes and weaker affordability,” says David M. Blitzer, managing director and chairman of the index committee at S&P Dow Jones Indices. “Sales peaked in November 2017 and drifted down through 2018. Affordability reflects higher prices and increased mortgage rates through much of last year. Following a shift in [Federal Reserve] policy in December, mortgage rates backed off to 4.45 percent, from 4.95 percent.”
The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported a 5.2 percent annual gain in November, down from 5.3 percent in the previous month. The 10-City Composite annual increase came in at 4.3 percent, down from 4.7 percent, in the previous month.
The 20-City Composite posted a 4.7 percent year-over-year gain as of November 2018, down from 5 percent in the previous month. Las Vegas, Phoenix and Seattle reported the highest year-over-year gains among the 20 cities.
In November, Las Vegas led the way with a 12 percent year-over-year price increase, followed by Phoenix with an 8.1 percent increase and Seattle with a 6.3 percent increase. Seven of the 20 cities reported greater price increases in the year ending November 2018, compared to the year ending October.
Before seasonal adjustment, the National Index posted a month-over-month gain of 0.1 percent in November. The 10-City and 20-City Composites both reported a 0.1 percent decrease for the month. After seasonal adjustment, the National Index recorded a 0.4 percent month-over-month increase in November.
The 10-City Composite and the 20-City Composite posted 0.3 percent month-over-month increases. In November, eight of 20 cities reported increases before seasonal adjustment, while 15 of 20 cities reported increases after seasonal adjustment.
“Housing market conditions are mixed while analysts’ comments express concerns that housing is weakening and could affect the broader economy,” said Blitzer. “Current low inventories of homes for sale--about a four-month supply--are supporting home prices. Stable 2 percent inflation, continued employment growth, and rising wages are all favorable. Measures of consumer debt and debt service do not suggest any immediate problems.”
