United States: Home price growth accelerates to nine-month high in November
January 28, 2020
The S&P/Case-Shiller 20-city composite home price index rose 0.1% on a month-on-month basis in November, matching October’s increase. When adjusted for seasonal factors, home prices were up 0.5% in November, accelerating from 0.4% in October and beating market expectations.
In annual terms, home price growth increased to 2.6% in November from 2.2% in October, marking the strongest outturn since February 2019, but remaining well below growth levels seen in the past few years. The reading overshot market expectations of 2.4% growth. Gains continued to be strongest in Phoenix, Charlotte and Tampa, respectively. San Francisco home prices rebounded slightly in the month, after declining in October, while price growth was nearly flat in Chicago and New York. Overall, 15 of the 20 cities in the index registered higher annual price growth in November versus October.
Commenting on November’s result, Craig J. Lazzara, managing director and global head of index governance at S&P Dow Jones Indices, noted:
“At a regional level, Phoenix retains the top spot for the sixth consecutive month, with a gain of 5.9% […] The Southeast has led all regions since January 2019.”
Tight inventories coupled with rising demand amid lower mortgage rates and a strong job market have been boosting prices. In fact, purchases of previously owned homes rose at the quickest clip in nearly two years in December, while the number of homes on the market hit a record low. FocusEconomics panelists expect housing prices to rise modestly in 2020.
Author: Lindsey Ice, Economist