United States: House price growth slows slightly in April
June 27, 2017
House price growth remained solid in April, supported by low supply of both new and existing homes and a robust labor market. The S&P/Case-Shiller 20-city home composite index rose 0.9% in April from the previous month, which was shy of March’s 1.0% increase. When adjusted for seasonal factors, home prices grew a much smaller 0.3% from the previous month. This was below the revised 0.5% increase recorded in March (previously reported: +0.9% seasonally-adjusted month-on-month) and market expectations of a 0.6% increase. The difference between adjusted and non-adjusted figures was due to relatively mediocre gains in home prices in March and April, which tend to be strong months for housing.
On a year-on-year basis, home prices continued to climb across the board in April, albeit as a slightly slower clip. Home price growth edged down from a nearly three-year high of 5.9% in March to 5.7% in April. S&P stressed that Seattle, Portland and Dallas, in that order, continued to report the strongest increases in prices of the 20 cities included in the index. The city that saw the smallest expansion was Cleveland, though prices there still grew by 3.4% in April.
Despite April’s deceleration, strong market fundamentals remain supportive of robust house price growth. Housing starts are trending higher, financing costs remain low and employment and income gains are healthy. Barring major surprises, continued home price appreciation should be seen in the months to come.
Author: David Ampudia, Economist