(Bloomberg)—Home prices in 20 U.S. cities registered their smallest gains since late 2012, decelerating for a 10th month in January as buyers held out for more affordable properties.
The S&P CoreLogic Case-Shiller index of property values increased 3.6 percent from a year earlier, down from 4.1 percent in the prior month and below the median estimate of economists, data showed Tuesday. Nationally, home-price gains slowed to 4.3 percent, the lowest since 2015.
Key Insights
The data indicate that the 2018 slump in housing extended to the start of this year amid the longest-ever government shutdown and still-elevated home prices. Potential buyers may have remained cautious after stocks had their worst December since the Great Depression, and a separate report this month showed sales of new U.S. homes fell to a three-month low in January. At the same time, other data suggest the market has since picked up: A report last week showed sales of previously owned U.S. homes rebounded in February to the fastest pace in almost a year. The seasonally adjusted 20-city index gained 0.1 percent from the prior month, less than projected. Economists watch the year-on-year gauge to better track trends, and home-price gains have slowed enough that they’re roughly in line with wage increases. A separate report Tuesday showed that U.S. new-home groundbreakings fell in February by the most in eight months on a drop in single-family homes, suggesting buyers and builders remain wary despite higher wages and a drop in mortgage rates.
Official’s View
“It remains to be seen if recent low mortgage rates and smaller price gains can sustain improved home sales,” David Blitzer, chairman of the S&P index committee, said in a statement.
All 20 cities in the index still showed year-over-year gains, led by a 10.5 percent increase in Las Vegas and 7.5 percent in Phoenix. The weakest gains were in San Diego, with 1.3 percent, and San Francisco at 1.8 percent -- down from 10.2 percent a year earlier. Seattle, another formerly hot market, showed a 4.1 percent annual increase, sharply decelerating from 12.8 percent last year. Prices in 14 cities rose from the prior month on a seasonally adjusted basis, while five declined and one was unchanged. The biggest drop came in San Francisco, at 0.6 percent.
--With assistance from Jordan Yadoo.To contact the reporter on this story: Reade Pickert in New York at [email protected] To contact the editors responsible for this story: Scott Lanman at [email protected] Brendan Murray
COPYRIGHT