United States: Home prices grow at fastest rate in nearly a year in December
The S&P/Case-Shiller 20-city composite home price index was unchanged on a month-on-month basis in December, down from November’s 0.1% increase. When adjusted for seasonal factors, home prices increased 0.4% in December, moderating from November’s 0.5% rise and beating market expectations.
In annual terms, home price growth edged up to 2.9% in December from 2.5% in November, marking the strongest uptick since January 2019, but remained well below growth levels seen in the past few years. The reading met market expectations. Gains continued to be strongest in Phoenix, Charlotte and Tampa, respectively. Overall, 12 of the 20 cities in the index registered higher annual price growth in December compared to November.
Commenting on November’s result, Craig J. Lazzara, managing director and global head of index governance at S&P Dow Jones Indices, noted:
“Results for 2019 were broad-based, with gains in every city in our 20-City Composite. […] The Southeast has led all regions for the past year. […] It is, of course, too soon to say whether this marks an end to the deceleration or is merely a pause in the longer-term trend.”
Tight inventories coupled with rising demand amid lower mortgage rates and a strong job market have been boosting prices and will likely continue to do so in the first quarter. FocusEconomics panelists expect housing prices to rise modestly in 2020.