The slowdown in the US housing market is, well, accelerating.
Following last month's disastrous starts and permits data, the Case Shiller's home price index was expected to show growth continuing to slow. and it did, considerably worse than expected.
Case-Shiller's 20-City Composite grew at just 3.00% YoY in January (just above the 2.95% YoY expectation but sharply below March's 3.51% YoY print). This is the weakest annual growth since September 2012, decelerating for an 11th month in January as buyers held out for more affordable properties. At the national leve, home prices grew at just a 4% rate, the smallest gain since 2012.
“The pace of increases for home prices continues to slow,” said David Blitzer, chairman of the S&P index committee. “Prices generally rose faster in inland cities than on either the coasts or the Great Lakes.”
Some more details:
- As has been the case for much of the past decade, all 20 cities in the index showed year-over-year gains, led by a 9.7% increase in Las Vegas and 6.7 percent in Phoenix.
- Increases have slowed considerably over the past year in California, with San Francisco, San Diego and Los Angeles all recording annual gains of below 2 percent. Seattle, another previously hot city, showed an advance of just 2.8 percent.
- Prices in 17 cities rose from the prior month on a seasonally adjusted basis, led by Tampa.
What is odd is that despite alleged wage gains and lower interest rates and borrowing costs, buyers have still been holding out for more affordable properties.
That said, as Bloomberg notes, price gains may pick up in the coming months amid signs of strength in demand as the latest new home sales report showed the fastest increase since 2017, while applications for loans to buy homes recently hit the highest weekly level in almost nine years.
Meanwhile, keep an eye on pending home sales later on Tuesday for a better sense of momentum in the housing market in the first half of the year. Analysts project contract signings rose for the second time in three months.