Case-Shiller: Home Price Gains Continued to Slow in April

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The pace of home price appreciation continued to slow in April.

On a seasonally adjusted basis, home prices increased 0.3% compared with March and were up 3.5% compared with April 2018, according to the S&P CoreLogic Case-Shiller home price index

In March, the annual gain was 3.7%.

The 10-city composite posted a 0.2% increase while the 20-city composite was flat compared with the previous month. 

Before seasonal adjustment, home prices increased 0.9% in April compared with Match.

The 10-city composite saw an 0.8% increase for the month, on an unadjusted basis, while the 20-city saw a 0.3% increase.

Las Vegas, Phoenix and Tampa saw the highest year-over-year gains among the 20 cities.

Las Vegas led the way with a 7.1% year-over-year increase, followed by Phoenix at 6.0% and Tampa at 5.6%.

Nine of the 20 cities reported greater price increases in the year ended April versus the year ended March.

“Home price gains continued in a trend of broad-based moderation,” says Philip Murphy, managing director and global head of index governance at S&P Dow Jones Indices, in a statement. “Year-over-year price gains remain positive in most cities, though at diminishing rates of change.

“Seattle is a notable exception, where the [annual] change has decreased from 13.1% in April 2018 to 0.0% in April 2019,” Murphy adds.

Unlike previous cycles, there seems to be no relationship between home price appreciation and mortgage rates this time around.

“The national average 30-year fixed mortgage rate rose from below four percent in late 2017 to briefly reaching almost five percent by the latter part of 2018,” Murphy says. “Peak year-over-year changes in the 20-city composite coincided with the upward turn in mortgage rates during the first quarter of 2018. In 2019, mortgage rates reversed course again and the 30-year fixed mortgage rate is again under four percent, yet the [annual] house price moderation that coincided with the 2018 uptick in rates has not changed course.

“Other industry statistics are consistent with this observation,” Murphy continues. “For example, the national supply of housing is trending upward and suggesting weaker demand. Perhaps the trend for the moment is toward normalization around the real long run average annual price increase. Comparing the [annual] national index nominal change of 3.5 percent to April’s inflation rate of two percent yields a real house price change of 1.5 percent – edging closer to the real long run average of 1.2 percent cited [in last month’s report].”

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