Steel Markets

Slower Home Price Growth in December

Written by Sandy Williams

The rate of price growth for homes in the United States continued its slowing trend in December. The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index grew 4.7 percent year-over-year in December compared to a gain of 5.1 percent in November. The 20-City composite posted a 4.2 percent year-over-year gain compared to 4.6 percent the previous month.

“The annual rate of price increases continues to fall,” says David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices. “Even at the reduced pace of 4.7 percent per year, home prices continue to outpace wage gains of 3.5 percent to 4 percent and inflation of about 2 percent. A decline in interest rates in the fourth quarter was not enough to offset the impact of rising prices on home sales. The monthly number of existing single-family homes sold dropped throughout 2018, reaching an annual rate of 4.45 million in December. The 2018 full-year sales pace was 4.74 million.”

Prices gains were led by home sales in Las Vegas, Phoenix and Atlanta, with year-over-year increases of 11.4 percent, 8.0 percent and 5.9 percent, respectively.

“Regional patterns continue to shift,” said Blitzer. “Seattle and Portland, Ore., experienced the fastest price increases of any city from late 2016 to the spring of 2018; in December, they ranked 11th and 16th. Currently, the cities with the fastest price increases are Las Vegas and Phoenix. These are a reminder of how prices rose and collapsed in the financial crisis 12 years ago. Despite their recent gains, Las Vegas and Phoenix are the furthest below their 2006 peaks of any city followed in the S&P CoreLogic Case-Shiller Indices.”

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