Home prices in the U.S. grew 5.5 percent in September according to the latest S&P CoreLogic Case-Shiller National Home Price Index. This is the sixth consecutive month of slowing home price growth, which is now at its lowest level since January 2017.
Average home prices for the top 10 metropolitan areas increased 4.8 percent, down from the previous month of 5.2 percent. The top 20 metropolitan areas also posted a gain of 5.1 percent year over year, which is down from 5.5 percent from August 2018. Furthermore, nine of the 20 metropolitan areas reported slower price increases in September 2018 versus the previous month.
Home prices have continued to rise particularly fast in the West of the country, with Las Vegas (13.5 percent), San Francisco (9.9 percent) and Seattle (8.4 percent) accounting for the highest year-over-year price increases.
Despite the continued increase in home price appreciation, it appears that the momentum in housing market is slowing. Observers of the housing market may have noticed other major indicators such as housing starts, new home sales, existing home sales and homebuilder confidence have also trended down over the past few months.
While these trends point to a softening in the housing market, there is little reason for panic. Current housing supply is still low: new and existing housing supply remain well below long-term historical averages. Future housing demand should continue to be robust: households under the age of 35, which account for the largest pool of potential homebuyers, are starting to show signs they’re buying homes. Both factors should help long-term investors in the housing market remain confident.
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