Case-Shiller: Home Price Appreciation Continued to Slow in December


Home prices continued to rise in December but at a much slower pace than in previous months.

On an adjusted basis, home prices increased 0.3% month-over-month and were up 4.7% compared with December 2017, according to the S&P CoreLogic Case-Shiller home price index.

The index’s 10-city and 20-city composites each posted 0.2% month-over-month increase.

Looking at home price growth year-over-year, however, reveals slowing appreciation: The 10-city composite was up 3.8%, down from 4.2% in November.

The 20-city composite posted a 4.2% year-over-year gain, down from 4.6%.

Without seasonal adjustment, U.S. home price decreased 0.1% in December compared with November.

The 10-city and 20-city composites each decreased 0.2% for the month. 

Las Vegas, Phoenix and Atlanta reported the highest year-over-year gains among the 20 cities. 

In December, Las Vegas led the way with an 11.4% year-over-year price increase, followed by Phoenix at 8.0% and Atlanta at 5.9%.

“The annual rate of price increases continues to fall,” says David M. Blitzer, managing director and chairman of the index committee at S&P Dow Jones Indices, in a statement. “Even at the reduced pace of 4.7% per year, home prices continue to outpace wage gains of 3.5% to 4% and inflation of about 2%.

“A decline in interest rates in the fourth quarter was not enough to offset the impact of rising prices on home sales,” Blitzer adds. “The monthly number of existing single family homes sold dropped throughout 2018, reaching an annual rate of 4.45 million in December. The 2018 full year sales pace was 4.74 million.”

As far as home prices go, “regional patterns continue to shift,” Blitzer says.

“Seattle and Portland experienced the fastest price increases of any city from late 2016 to the spring of 2018,” he says. “In December, they ranked 11th and 16th.”

“Currently, the cities with the fastest price increases are Las Vegas and Phoenix,” he adds. “These are a reminder of how prices rose and collapsed in the financial crisis 12 years ago. Despite their recent gains, Las Vegas and Phoenix are the furthest below their 2006 peaks of any city followed in the S&P CoreLogic Case-Shiller Indices.”

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