According to the latest S&P CoreLogic Case-Shiller National Home Price Index, home prices in the United States grew by 4 percent in February. This is the 11th consecutive month of slowing home-price growth, which is now at its lowest level of growth since October 2012.
Average home prices for the top 10 metropolitan areas increased 2.6 percent, down from the previous month’s 3.1 percent increase. The top 20 metropolitan areas also posted a gain of 3 percent year over year, down from 3.5 percent in January. Furthermore, 19 of the top 20 metropolitan areas reported lower price increases compared to the previous month, with only Tampa showing a slight pickup in price growth.
Las Vegas (0.7 percent), Phoenix (6.7 percent) and Tampa (5.4 percent) accounted for the highest year-over-year price increases, while metros with the largest slowdown from the previous year were along the Pacific: Seattle (9.9 point drop), San Francisco (8.7 point drop) and San Diego (6.5 point drop).
While we’re not yet in a national buyer’s market, the transition to one has already begun in several markets. Given persistent affordability constraints we’ve seen along the Pacific Coast over the past several years, it’s quite possible that March or April’s numbers will bring us the first markets to see price declines since December 2012. In particular, places like San Diego, San Francisco and Los Angeles have been on steep downward price trajectories that may push them into negative territory over the next few months. We also expect the slowdown in these markets to push March’s S&P CoreLogic Case-Shiller National Home Price Index to about 3.8 percent growth year over year.
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