U.S. home price growth slowed in November.
Standard & Poor’s said Tuesday that its S&P CoreLogic Case-Shiller national home price index posted a 5.2% annual gain in November, down from 5.3% in the previous month. It’s the eighth consecutive month of a slowdown. The 20-City Composite posted a 4.7% year-over-year gain — missing analysts’ estimates of 4.89%. The 20-City was also down from 5% in October.
“The pace of price increases are being dampened by declining sales of existing homes and weaker affordability,” said David M. Blitzer, managing director and chairman of the Index Committee at S&P Dow Jones Indices, in a press statement.
Existing home sales in December hit their lowest level since November 2015, according to the National Association of Realtors. Existing home sales declined 6.4% to a seasonally adjusted annual rate of 4.99 million units last month. New home sales data as well as building permits and housing starts for December are not available due to the partial government shutdown, which began on Dec. 22, but are expected to be released by Feb. 4 now that the government has reopened.
“Sales peaked in November 2017 and drifted down through 2018,” said Blitzer. “Housing market conditions are mixed while analysts’ comments express concerns that housing is weakening and could affect the broader economy. Current low inventories of homes for sale — about a four-month supply — are supporting home prices.”
Las Vegas, once again, led the 20-City Composite reporting the highest annual gain of 12%. Las Vegas has led the 20-City Composite since dethroning Seattle in June. Seattle rounded out the top three cities with the most price gains in the index posting a 6.3% increase, after falling out of the top three in October.
The Case Shiller index results tend to lag other housing indicators, wrote JPMorgan in a research note Tuesday, “some of the more timely indicators have perked up a bit now that mortgage rates have declined over the past couple of months.”
Last week, the Mortgage Bankers Association reported an uptick in loan applications due to a decline in mortgage rates since mid-November. Additionally, home builder sentiment improved in January. Both promising signs for the housing market.
“Mortgage rates are fairly stable for now, and the end of the federal government shutdown may re-inject some positive momentum into the market after a dismal end to 2018,” said Zillow Senior Economist Aaron Terrazas in a statement.
Amanda Fung is an editor at Yahoo Finance.