Home Prices Increased in November, But Pace Slowed

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U.S. home prices increased .04% on an adjusted basis in November compared with October and were up 5.2% compared with November 2017, according to latest S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index report.

On a month-over month basis, the 10-city composite and the 20-city composite each posted a 0.3% month-over-month increase.

Year-over-year, the 10-city composite saw home prices increase 4.3%, compared with November 2017, while the 20-city composite saw prices increase 4.7%.

On an unadjusted basis, home prices increased 0.1% nationally in November compared with October. The 10-city and 20-city composites both reported a 0.1% decrease for the month.

Las Vegas, Phoenix and Seattle reported the highest year-over-year gains among the 20 cities. In November, Las Vegas led the way with a 12.0% year-over-year price increase, followed by Phoenix at 8.1% and Seattle at 6.3%.

Seven of the 20 cities reported greater price increases in the year ended November 2018 versus the year ended October 2018.

“Home prices are still rising, but more slowly than in recent months,” says David M. Blitzer, managing director and chairman of the index committee at S&P Dow Jones Indices, in a statement. “The pace of price increases are being dampened by declining sales of existing homes and weaker affordability. Sales peaked in November 2017 and drifted down through 2018. Affordability reflects higher prices and increased mortgage rates through much of last year. Following a shift in Fed policy in December, mortgage rates backed off to about 4.45% from 4.95%.

“Housing market conditions are mixed while analysts’ comments express concerns that housing is weakening and could affect the broader economy,” Blitzer adds. “Current low inventories of homes for sale – about a four-month supply – are supporting home prices. New home construction trends, like sales of existing homes, peaked in late 2017 and are flat to down since then. Stable two percent inflation, continued employment growth, and rising wages are all favorable. Measures of consumer debt and debt service do not suggest any immediate problems.”

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