Home prices propelled up in December, according to the S&P CoreLogic/Case-Shiller Indices.
The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index’s 10-City Composite, which is an average of 10 metros (Boston, Chicago, Denver, Las Vegas, Los Angeles, Miami, New York, San Diego, San Francisco and Washington, D.C.), rose 6 percent year-over-year, mirroring November, which posted the same.
The 20-City Composite—which is an average of the 10 metros in the 10-City Composite, plus Atlanta, Charlotte, Cleveland, Dallas, Detroit, Minneapolis, Phoenix, Portland, Seattle and Tampa—rose 6.3 percent year-over-year, a decline from 6.4 percent in November. Month-over-month, both the 10-City Composite and the 20-City Composite rose, each 0.2 percent.
According to S&P Chairman of the Index Committee and Managing Director David M. Blitzer, housing and inflation are on similar trajectories, but home prices are in the lead—vastly.
“The rise in home prices should be causing the same nervous wonder aimed at the stock market after its recent bout of volatility,” says Blitzer. “Across the 20 cities covered by S&P Corelogic Case Shiller Home Price Indices, the average increase from the financial crisis low is 62 percent; over the same period, inflation was 12.4 percent. None of the cities covered in this release saw real, inflation-adjusted prices fall in 2017.”
Blitzer is eyeing factors, however, that point to a slowdown.
“Within the last few months, there are beginning to be some signs that gains in housing may be leveling off,” Blitzer says. “Sales of existing homes fell in December and January after seasonal adjustment and are now as low as any month in 2017. Pending sales of existing homes are roughly flat over the last several months. New-home sales appear to be following the same trend as existing-home sales. While the price increases do not suggest any weakening of demand, mortgage rates rose from 4 percent to 4.4 percent since the start of the year. It is too early to tell if the housing recovery is slowing. If it is, some moderation in price gains could be seen later this year.”
According to the National Association of REALTORS® (NAR), existing-home sales fell 3.6 percent in December and 3.2 percent in January—the latter the lowest in more than three years. New-home sales thudded 7.8 percent in January, the Commerce Department recently reported. December pending sales eked out an 0.5 percent gain, data from NAR show.
Crippling growth is the inventory shortage, which continues to constrain sales as buyers face a lean pool of supply.
The complete data for the 20 markets measured by S&P Dow Jones:
Month-Over-Month (MoM): 0.3%
Year-Over-Year (YoY): 5.4%
Las Vegas, Nev.
Los Angeles, Calif.
New York, N.Y.
San Diego, Calif.
San Francisco, Calif.