S&P/Case-Shiller Home Price Index: Increases Continue To Slow

With today's release of the November S&P/Case-Shiller Home Price Index, we learned that seasonally adjusted home prices for the benchmark 20-city index were up 0.30% month over month. The seasonally adjusted national index year-over-year change has hovered between 4.2% and 6.7% for the last two-plus years. Today's S&P/Case-Shiller National Home Price Index (nominal) reached another new high.

The adjacent column chart illustrates the month-over-month change in the seasonally adjusted 20-city index, which tends to be the most closely watched of the Case-Shiller series. It was up 0.30% from the previous month. The nonseasonally adjusted index was up 4.7% year-over-year.

Investing.com had forecast a 0.4% MoM seasonally adjusted increase and 4.9% YoY nonseasonally adjusted for the 20-city series.

Here is an excerpt from the analysis in today's Standard & Poor's press release.

“Home prices are still rising, but more slowly than in recent months,” says David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices. “The pace of price increases are being dampened by declining sales of existing homes and weaker affordability. Sales peaked in November 2017 and drifted down through 2018. Affordability reflects higher prices and increased mortgage rates through much of last year. Following a shift in Fed policy in December, mortgage rates backed off to about 4.45% from 4.95%.

“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. New home construction trends, like sales of existing homes, peaked in late 2017 and are flat to down since then. Stable 2% inflation, continued employment growth, and rising wages are all favorable. Measures of consumer debt and debt service do not suggest any immediate problems.” [Link to source]

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