United States: Home price growth continues to slide in November
January 29, 2019
Home price growth remained on a downward trajectory for the eighth month running in November. On a month-on-month basis, the S&P/Case-Shiller 20-city composite home price index fell 0.1% in November, after three consecutive flat readings in previous months. When adjusted for seasonal factors, house prices grew 0.3% from the previous month, down from 0.4% in October and missing market expectations of 0.4%.
In annual terms, home price growth fell to a nearly three-year low of 4.7% in November, down from 5.0% in October. Price gains in West Coast cities remained far stronger than Midwestern and East Coast cities, with Las Vegas, San Francisco and Phoenix registering the largest year-on-year price increases. Overall, 13 out of the 20 cities in the index registered slower annual price growth in November.
Commenting on the outlook, David Blitzer, managing director at S&P Dow Jones Indices, noted:
“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. 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.”
Author: Joffrey Simonet, Economist