United States: Home price growth strengthens slightly in October
On a month-on-month basis, the S&P/Case-Shiller 20-city composite home price index rose 0.1% in October, matching September’s increase. When adjusted for seasonal factors, home prices increased 0.4%, up from 0.3% in September and meeting market expectations.
In annual terms, home price growth rose to 2.2% in October from 2.1% in September, marking a five month-high but remaining well below growth levels seen in the prior year. The reading was in line with analysts’ expectations. Gains continued to be strongest in Phoenix, Tampa and Charlotte, respectively. Conversely, San Francisco remained the sole city to see prices fall. Overall, 12 of the 20 cities in the index registered higher annual price growth in October than in September.
Commenting on the reading, Craig J. Lazzara, managing director and global head of index governance at S&P Dow Jones Indices, noted:
“October’s U.S. housing data continue to be reassuring […] It is, of course, still too soon to say whether this marks an end to the deceleration or is merely a pause in the longer-term trend.”
FocusEconomics panelists expect housing prices to rise modestly in 2020. Low mortgage rates and a strong job market should support real estate demand and strengthen the nascent recovery in residential investment. That said, tight supply and the issue of affordability, particularly in some West Coast markets, will likely continue to weigh on the housing market.