According to the latest S&P CoreLogic Case-Shiller National Home Price Index, home prices in the United States grew by 4.3 percent in January. This is the 10th consecutive month of slowing home-price growth, which is now at its lowest level of growth since April 2015.
Average home prices for the top 10 metropolitan areas increased 3.2 percent, down from the previous month’s 3.7 percent increase. The top 20 metropolitan areas also posted a gain of 3.6 percent year over year, down from 4.1 percent in December. Further, 19 of the top 20 metropolitan areas reported lower price increases month over month, up from 16 in the previous month.
While western metros continue to lead home price growth, there is considerable cooling along the Pacific Coast. Las Vegas (10.5 percent), Phoenix (7.5 percent) and Minneapolis (5.1 percent) accounted for the highest year-over-year price increases, while Seattle (8.8 point drop), San Francisco (8.4 point drop) and San Diego (6.1 point drop) experiencing the largest home-price growth declines over the past year.
What will the spring homebuying season look like this year? One of balance. With mortgage rates pulling back from highs not seen since 2011, and inventory continuing on a slow and steady rise, we expect buyers to enter the peak buying season a little more confidently than at the end of 2018. Homes are now sitting on the market longer, and price cuts are becoming more common, which means sellers need to be more diligent in pricing than in previous years. As a result, we expect February’s S&P CoreLogic Case-Shiller National Home Price Index to slow to about 4 percent growth year over year.
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