The Beginning of the End of Explosive Prices
In September, the growth in home prices slowed to 5.5 percent, continuing a cooldown that surfaced this summer, according to the latest S&P CoreLogic/Case-Shiller Indices.
With buyers grappling with increasing mortgage rates, prices were ripe to stabilize. With the exception of October, existing-home sales have settled into a slump for the year, and housing starts, overall, have been weak.
“Sales of both new and existing single-family homes peaked one year ago in November 2017,” says David M. Blitzer, chairman and managing director of the Index Committee at S&P Dow Jones Indices. “Sales of existing homes are down 9.3 percent from that peak. Housing starts are down 8.7 percent from November of last year. The National Association of Home Builders sentiment index dropped seven points to 60, its lowest level in two years.
“One factor contributing to the weaker housing market is the recent increase in mortgage rates,” Blitzer says. “Currently the national average for a 30-year fixed rate loan is 4.9 percent, a full percentage point higher than a year ago.
“Home prices, plus data on house sales and construction, confirm the slowdown in housing.”
The Case-Shiller 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 4.8 percent year-over-year, a decrease from 5.2 percent in August. 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 5.1 percent year-over-year, also a decrease, from 5.5 percent in August. Month-over-month, there were no gains in the 10-city and 20-city composites.
The complete data for the 20 markets measured by S&P:
Las Vegas, Nev.
Los Angeles, Calif.
New York, N.Y.
San Diego, Calif.
San Francisco, Calif.