Home price growth continued to decelerate.
Standard & Poor’s said Tuesday that its S&P CoreLogic Case-Shiller national home price index posted a 4% annual gain in February, down from 4.2% a month earlier. The 20-City Composite posted a 3% year-over-year gain, down from 3.5% in January. The results beat analysts’ estimates of a 3.9% annual gain and 2.95% annual gain for national and 20-City, respectively, according to Bloomberg. The declines mark the 11th straight month of deceleration.
“The pace of increases for home prices continues to slow,” said David M. Blitzer, managing director and chairman of the Index Committee at S&P Dow Jones Indices, in a press statement. “Homes began their climb in 2012 and accelerated until late 2013 when annual increases reached double digits. Subsequently, increases slowed until now when the National Index is up 4% in the last 12 months.”
Separately, the National Association of Realtors on Tuesday reported that pending home sales rose 3.8% in March from a month earlie,r but dipped 1.2% from a year ago. Lawrence Yun, the chief economist at the NAR, noted that pending home sales, a leading indicator for how the housing market will fare, has been fluid over the past several months and predicts that numbers will begin to climb.
“The increase in pending home sales in March aligns with the rise in purchase applications we reported for the month,” said Mike Fratantoni, chief economist at the Mortgage Bankers Association, in a press statement. “The strengthening job market, combined with lower mortgage rates and increased housing supply in many markets, helped more prospective buyers find a home last month. In short, conditions are ripe for further sales increases in the coming months.”
The results follow mixed housing data released last week. The U.S. Commerce Department said sales of new U.S. homes increased 4.5% in March, the third straight monthly gain and the strongest since November 2017. A possible sign that the housing market may be recovering from a home-buying slump. New-home sales were 1.7% higher in the first three months of 2019 compared to the same period a year ago.
But the upbeat data followed existing home sales results which revealed a 4.9% decline in March. The National Association of Realtors said last week that home sales fell 4.9% to a seasonally adjusted annual rate of 5.21 million, down from 5.48 million in February. The drop followed an 11.2% gain the previous month, the largest in more than three years.
“Sales of existing single family homes have recovered since 2010 and reached their peak one year ago in February 2018,” said Blitzer. “Home sales drifted down over the last year except for a one-month pop in February 2019.”
Price gain shifts regionally
Once again Las Vegas led the 20-City Composite posting a 9.7% annual gain. The city has recorded the fastest annual price growth since June 2018, when it overtook Seattle. But even price growth in Las Vegas has slowed. In January, Vegas posted a 10.5% annual gain. In fact, only one of the 20 cities reported greater price increases in the year ending February 2019 versus the year ending January 2019.
“Last year, the largest gain was 12.7% in Seattle,” said Blitzer. “Regional patterns are shifting. The three California cities of Los Angeles, San Francisco and San Diego have the three slowest price increases over the last year. Prices generally rose faster in inland cities than on either the coasts or the Great Lakes. Aside from Las Vegas, Phoenix, and Tampa, which saw the fastest gains, Atlanta, Denver, and Minneapolis all saw prices rise more than 4% — twice the rate of inflation.”
Amanda Fung is an editor at Yahoo Finance.