United States: Home price growth slows to near seven-year low in April
Home prices registered solid monthly gains in April, but this came largely on the back of seasonal effects. On a month-on-month basis, the S&P/Case-Shiller 20-city composite home price index rose 0.8% in April, up from 0.7% in March. When adjusted for seasonal factors, however, house prices were flat month-on-month, down from March’s 0.3% and below market expectations of 0.2%.
Thus, home price growth continued to slow in annual terms, from a revised 2.6% in March (previously reported: +2.7% year-on-year), to 2.5% in April, missing analysts’ expectations of 2.6% growth. Las Vegas, Phoenix and Tampa registered the largest year-on-year price increases, while prices were flat in Seattle, and momentum was weakest in San Diego and Los Angeles. Overall, 11 out of the 20 cities in the index registered slower annual price growth in April than in March.
Commenting on the reading, Philip Murphy, managing director and global head of index governance at S&P Dow Jones Indices, noted:
“Peak YOY changes in the 20-City Composite coincided with the upward turn in mortgage rates during the first quarter of 2018. In 2019, mortgage rates reversed course again and the 30-year fixed mortgage rate is again under 4%, yet the YOY house price moderation that coincided with the 2018 uptick in rates has not changed course. Other industry statistics are consistent with this observation. For example, the national supply of housing is trending upward and suggesting weaker demand. Perhaps the trend for the moment is toward normalization around the real long run average annual price increase.”