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Home-Price Gains in 20 U.S. Cities Slow for 12th Straight Month

Further weakness would suggest residential investment could drag down economic growth for yet another quarter.

Home-Price Gains in 20 U.S. Cities Slow for 12th Straight Month
A newly constructed apartment building in the U.S. (Photographer: Scott McIntyre/Bloomberg)

(Bloomberg) -- Home-price gains in 20 U.S. cities decelerated in March for a 12th straight month, suggesting sellers have yet to fully adjust to buyers’ demands for affordable properties.

The S&P CoreLogic Case-Shiller index of property values increased 2.7% from a year earlier, the slowest since August 2012, data showed Tuesday. That was slightly above estimates though the monthly gain of 0.1% missed all analyst forecasts. Nationally, home-price gains slowed to a 3.7% pace.

Home-Price Gains in 20 U.S. Cities Slow for 12th Straight Month

Key Insights

  • Sellers are still struggling to attract buyers in some areas despite lower mortgage rates and more-sustained wage gains, with prices rising at less than half the pace of a year ago. Further weakness would suggest residential investment could drag down economic growth for yet another quarter, though eventually more attractive prices should help the market recover.
  • Other data on housing have been soft or mixed. A government report last week showed the median price for a new U.S. home increased in April to the highest level since December 2017 while sales eased from the prior month. Existing-home sales, which make up the majority of the U.S. housing market, unexpectedly fell in April while single-family housing permits fell to the lowest level in almost two years.

Official’s View

“Given the broader economic picture, housing should be doing better,” David Blitzer, chairman of the S&P index committee, said in a statement. “Measures of household debt service do not reveal any problems and consumer sentiment surveys are upbeat. The difficulty facing housing may be too-high price increases,” which continue to outpace inflation, he said.

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  • While all 20 cities in the index showed year-over-year gains, five were below 2%: Chicago, Los Angeles, San Diego, San Francisco and Seattle, which a year ago posted a 13% increase. Las Vegas led the nation in March with an 8.2% gain, followed by Phoenix.
  • Prices in 14 cities rose from the prior month on a seasonally adjusted basis, while three were down and three were unchanged.
  • An index by the Federal Housing Finance Agency showed prices rose 4.9% in March from a year earlier, according to a separate report Tuesday. The gain from February was 0.1%, lower than the median estimate of 0.2%.

--With assistance from Christine Maurus and Kristy Scheuble.

To contact the reporter on this story: Reade Pickert in Washington at epickert@bloomberg.net

To contact the editors responsible for this story: Scott Lanman at slanman@bloomberg.net, Alister Bull

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