Home Prices in 20 U.S. Cities Rise at Slowest Pace Since 2016

(Bloomberg) -- Home-price gains in 20 U.S. cities cooled in August to the slowest pace since 2016, as high borrowing costs and property values limit buyer interest, according to S&P CoreLogic Case-Shiller data released Tuesday.

Key Takeaways

August marks the fifth consecutive month that annual price gains in the 20-city index decelerated, reinforcing signs that the housing market is cooling. Other recent reports showed purchases of previously-owned U.S. homes fell in September to the weakest pace in three years, while new-home sales tumbled to the lowest since December 2016. Housing starts also declined in September amid disruptions from Hurricane Florence.

The report showed three cities recorded monthly price declines in August, led by a 1 percent drop in Seattle, which had been one of the nation’s hottest housing markets. Las Vegas had the fastest increase, at 1.1 percent.

Continued job gains and elevated consumer sentiment have helped boost demand for housing, but shortages in available and affordable listings persist. Meanwhile, mortgage rates near a seven-year high have limited buyer interest.

Economist Views

“Following reports that home sales are flat to down, price gains are beginning to moderate,” David Blitzer, chairman of the S&P index committee, said in a statement. “There are no signs that the current weakness will become a repeat of the crisis, however.”

Other Details

• Las Vegas had the biggest annual increase at 13.9 percent, followed by San Francisco at 10.6 percent and Seattle at 9.6 percent
• New York and Washington had smallest gains, each at 2.8 percent

To contact the reporter on this story: Sarah Foster in Washington at sfoster94@bloomberg.net

To contact the editors responsible for this story: Brendan Murray at brmurray@bloomberg.net, Scott Lanman, Randall Woods

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