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Commentary & Analysis

Case-Shiller: Price Growth Continues to Decline, Marking Slowdown

By Cheryl Young | November 27, 2018
  • The housing market continues to chill with home price growth tracking up 5.5% in September, marking the 7th consecutive month of flat or slowing growth.
  • Rising mortgage rates, high prices and low supply have caught up with home buyers who can no longer justify purchases as the market slows. Meanwhile the ascent of mortgage rates exacerbates affordability concerns, especially for first-time home buyers.
  • The West still leads price appreciation, but even the hottest markets are beginning to slow their roll; Las Vegas leads 13.5% price growth, followed by San Francisco at 9.9%. Home price growth in Seattle continues its return to earth at 8.4%.

Home prices in the U.S. climbed 5.5% in September according to the latest S&P CoreLogic Case-Shiller National Home Price Index released on Tuesday. This marks the 7th consecutive month that home price growth has been flat or decelerated and the lowest year-over-year change since January 2017. Home prices continue to moderate as other indicators such as home sales also retreat. The housing market appears to be settling into a slowdown, but many homebuyers will continue to face headwinds brought on by recovering inventory, still high prices and mortgage rates threatening to surpass the 5% mark.

The West continues to dominate price growth, but even among the top three markets home price growth is decelerating. Last Vegas continues to log double-digit price growth at 13.5%, but this is down from 13.9% in August. San Francisco shows some easing of home price growth at 9.9%, down from double-digits since the beginning of the year. Seattle home prices have slowed the most dramatically; September saw home price growth at 8.4%, a markedly lower rate than the 11.5% seen two months ago. Four of the 20 markets that the index tracks saw monthly gains in price growth in September as flat or declining price appreciation spreads.