In October, home-price growth in the United States slowed for the second month in a row, indicating that the country’s hot housing jobs market may be cooling.
The S&P CoreLogic Case-Shiller National Home Price Index, which measures average home prices in major metropolitan areas across the country, rose 19.1 percent in the year ending in October, down from 19.7 percent the previous month.
Due to low mortgage interest rates, home-buying demand has increased in the last year, and existing-home sales are on track to reach their highest annual level since 2006. Due to fierce buyer competition for a limited number of available homes, prices have reached all-time highs.
The Case-Shiller index, which measures repeat sales, has a two-month lag. The median existing-home sale price in November increased 13.9 percent year on year to $353,900, according to the National Association of Realtors jobs earlier this month.
Some buyers jobs are being priced out of the market as home prices rise. While the number of home sales increased in November, the proportion of first-time buyers fell to 26%, the lowest level since January 2014 and down from 32% a year earlier, according to the National Association of Realtors.
“U.S. home prices moved substantially higher, but at a decelerating rate,” said Craig Lazzara, managing director at S&P Dow Jones Indices. “That said, October’s 19.1% gain in the national composite is the fourth-highest reading in the 34 years covered by our data” with the top three being the three months preceding October.
The Case-Shiller 10-city index rose 17.1 percent year on year in October, compared to 17.9 percent in September. After a 19.1 percent annual gain in September, the 20-city index rose 18.4 percent in October. In six of the twenty cities, price growth has accelerated. Economists surveyed by The Wall Street Journal expected the 20-city index to gain 18.6%.
For the 29th month in a row, Phoenix had the fastest home-price growth in the country, at 32.3 percent, extending the city’s record run at the top. Tampa grew at the second-fastest rate, at 28.1 percent. A separate measure of home-price growth released Tuesday by the Federal Housing Finance Agency found a 17.4 percent increase in home prices in October compared to the previous year.
Source: The Wall Street Journal