United States: House price growth continues to slow to 20-month low in August
Home price growth continued its five-month downward trend in August. The S&P/Case-Shiller 20-city composite home price index was flat month-on-month, down from the 0.3% increase logged in July. When adjusted for seasonal factors, house prices grew 0.1% from the previous month in August, matching both July’s print and market expectations.
In annual terms, home price growth fell to a 20-month low in August, registering a 5.5% increase, down from 5.9% in July. As in previous months, price gains in West Coast cities remained far stronger than Midwestern and East Coast Cities. Las Vegas, Seattle and San Francisco continued to register the largest year-on-year price increases. Overall, 14 out of the 20 cities in the index registered slower annual price increases in August.
House price growth is expected to continue softening in the months ahead due to lower demand, caused notably by a decline in housing affordability amid rising interest rates. As remarked by S&P Dow Jones Indices Managing Director David Blitzer, “Following reports that home sales are flat to down, price gains are beginning to moderate. Other housing data tell a similar story: prices and sales of new single-family homes are weakening; housing starts are mixed and residential fixed investment is down in the last three quarters. Rising prices may be pricing some potential home buyers out of the market, especially when combined with mortgage rates approaching 5% for 30-year fixed rate loans.”