Home prices in 20 U.S. cities rose in November at the slowest pace since early 2015, decelerating for an eighth straight month as buyers balk at the ever-receding affordability of properties.
The S&P CoreLogic Case-Shiller index of property values increased 4.7% from a year earlier, down from 5% in the prior month, and below the median estimate of economists, data showed Tuesday. Nationally, home-price gains slowed to a 5.2% pace.
The data further underscore a slowdown in the housing market, along with figures showing sales cooled throughout 2018 as mortgage rates increased, compounding the problem of affordability for many potential buyers already facing steep property prices and scarce supplies. At the same time, economists don’t expect the market to crash, given support from tax cuts, rising wages and general economic health.
In early 2019, falling mortgage rates, slower price gains and an expanding supply of homes may attract more buyers. The seasonally adjusted 20-city index advanced 0.3% from the prior month, also below the 0.4% median estimate of analysts. Economists watch the year-on-year gauge to better track trends, which show home-price gains have been outpacing wages.
The housing market has undergone some swings since November, with other figures showing sales plummeted in December. So far this year, applications for home-purchase loans have jumped amid a drop in mortgage rates.
“Price increases are being dampened by declining sales of existing homes and weaker affordability,” David Blitzer, chairman of the S&P index committee, said in a statement. “Housing market conditions are mixed while analysts’ comments express concerns that housing is weakening and could affect the broader economy.”
All 20 cities in the index showed year-over-year gains, led by a 12% increase in Las Vegas and 8.1% advance in Phoenix. The weakest gains were in Washington, Chicago and San Diego. New York also had a subdued increase, at 3.5%. Prices in Cleveland, San Francisco and Seattle fell from the prior month on a seasonally adjusted basis.