- Home price growth rose 5.8% in August, but this is the 5th consecutive month the pace of price growth slowed, reinforcing signs that the housing market is slackening.
- As home price growth continues to outpace wage growth and mortgage rates hover at seven-year highs, affordability declines and weakening demand will continue to exert downward pressure on home prices.
- The usual suspects in the West led home price growth, with Las Vegas out front with a 13.9% increase in price gains, followed by San Francisco and Seattle. However, after years of double-digit price gains Seattle slipped into single-digit price growth for the first time since December 2015.
Home prices in the U.S. grew in August, up 5.8% year-over-year according to the latest S&P CoreLogic Case-Shiller National Home Price Index released on Tuesday. This is the 5th consecutive month of decelerating home price growth, driving the index down to its lowest level since July 2017. These numbers pad the growing set of indicators that the housing market is slackening: housing inventory is rising slightly for the first time in years, price cuts on home listings are on the rise and home sales are slowing. Meanwhile, mortgage rates are hovering around seven-year highs, giving additional pause to potential home buyers as affordability continues to decline. Weakening demand will continue to exert downward pressure on home prices.
Markets in the west lead what have become a set of usual suspects in terms of home price growth leaders. Las Vegas continues to dominate home price growth with a 13.9% increase in August. Not far behind was San Francisco with an increase of 10.6%. Seattle placed third in terms of home price growth at 9.6%, but this was the first time the index hit single digits since December 2015. Five of the 20 markets that the index tracks experienced monthly gains in August as price gains continue to dwindle.
