Home prices in 20 U.S. cities rise at slowest pace since 2016
Home-price gains in 20 U.S. cities cooled in August to the slowest pace since 2016, as high borrowing costs and property values limit buyer interest, according to S&P CoreLogic Case-Shiller data released Tuesday.
The 20-city property values index increased 5.5% year-over-year (the estimate was 5.8%) after 5.9% the prior month, the smallest gain since December 2016. The national home-price gauge rose 5.8% year-over-year, the slowest since mid-2017. The seasonally adjusted 20-city index rose 0.1% month-over-month (matching the estimate).
August marks the fifth consecutive month that annual price gains in the 20-city index decelerated, reinforcing signs that the housing market is cooling. Other recent reports showed purchases of previously owned U.S. homes fell in September to the weakest pace in three years, while new-home sales tumbled to the lowest since December 2016. Housing starts also declined in September amid disruptions from Hurricane Florence.
The report showed three cities recorded monthly price declines in August, led by a 1% drop in Seattle, which had been one of the nation's hottest housing markets. Las Vegas had the fastest increase, at 1.1%.
Continued job gains and elevated consumer sentiment have helped boost demand for housing, but shortages in available and affordable listings persist. Meanwhile, mortgage rates near a seven-year high have limited buyer interest.
"Following reports that home sales are flat to down, price gains are beginning to moderate," David Blitzer, chairman of the S&P index committee, said in a statement. "There are no signs that the current weakness will become a repeat of the crisis, however."
Las Vegas had the biggest annual increase at 13.9%, followed by San Francisco at 10.6% and Seattle at 9.6%. New York and Washington had smallest gains, each at 2.8%.