Steel Markets

Home Price Gains Continue to Cool

June 26, 2019

Home price gains continued to weaken in April, according to the latest S&P CoreLogic Case-Shiller Indices. The National Home Price NSA index gained 3.5 percent year-over-year compared to 3.7 percent the previous month. The 20-City composite was nearly flat with March, down 0.1 percent to post a 2.5 percent gain. Annual growth has slowed in each of the last 13 months.

Among the 20 cities surveyed, Las Vegas, Phoenix and Tampa reported the highest year-over-year gains at 7.2 percent, 6.0 percent and 5.6 percent, respectively. Nine of the 20 cities reported greater price increases in the year ending April 2019 versus the year ending March 2019.

“Home price gains continued in a trend of broad-based moderation,” says Philip Murphy, Managing Director and Global Head of Index Governance at S&P Dow Jones Indices. “Year-over-year price gains remain positive in most cities, though at diminishing rates of change. Seattle is a notable exception, where the YOY change has decreased from 13.1 percent in April 2018 to 0.0 percent in April 2019.”

Affordability still is a concern for buyers despite lower mortgage rates. Additionally, housing inventory is on an upward trend, suggesting weaker demand, he added.

“Perhaps the trend for the moment is toward normalization around the real long-run average annual price increase,” said Murphy. “Comparing the YOY National Index nominal change of 3.5 percent to April’s inflation rate of 2.0 percent yields a real house price change of 1.5 percent – edging closer to the real long-run average of 1.2 percent cited by [S&P Chairman] David Blitzer last month.”