U.S. home price growth slowed for the sixth consecutive month.
Standard & Poor’s said Tuesday that its S&P CoreLogic Case-Shiller national home price index reported a 5.5% annual gain in September, down from 5.7% in August. The 20-City Composite reported a 5.1% gain, missing analysts’ estimates of 5.2% and the slowest rate increase since November 2016. The 20-City was also down from 5.5% in the previous month.
“Home prices plus data on house sales and construction confirm the slowdown in housing,” said David M. Blitzer, managing director and chairman of the index committee at S&P Dow Jones Indices, in a press statement.
Last week, Goldman Sachs wrote in a research note that the post-2012 boom in home prices has ended. It expects home price appreciation to slide back to a 3%-4% annual pace of increases over the next three year.
Price growth in Seattle slows, Vegas still hot
“Sixteen of 20 cities showed smaller annual price gains. On a monthly basis, nine cities saw prices decline in September compared to August,” said Blitzer. Even in Seattle, “where prices were rising at double digit annual rates a few months ago, prices dropped last month,” he added.
For the fourth straight month, Las Vegas led the 20-City Composite posting a 13.5% year-over-year price increase. That city, along with Phoenix and Tampa, had the biggest gains and largest losses 10 years ago, according to Blitzer. Vegas dethroned Seattle in June as the city with the fastest price growth.
The slowdown in home-price growth follows a dip in both new and existing single home sales, which have peaked. Other measures of the housing market have also turned for the worse: Housing starts are down 8.7% from November of last year. The National Association of Home Builders sentiment index dropped seven points to 60, its lowest level in two years. Last month, Yale Economics Professor and Nobel Laureate Robert J. Shiller told Yahoo Finance that the weakness is reminiscent of 2006.
Blitzer said on Yahoo Finance’s Market Movers that the latest report “confirms the fact that housing activity is slowing. We’ve probably passed the peak for this housing cycle,” which started in 2009 at the end of the Great Recession.
He added that rising mortgage rates is one contributor to the cooling of the housing market. “Currently the national average for a 30-year fixed rate loan is 4.9%, a full percentage point higher than a year ago,” he said.
“The housing sector is not driving the economy at all at this point,” Blitzer said. “Housing is likely to trend down and continue to slow.”
Amanda Fung is an editor at Yahoo Finance.