U.S. home prices are still rising, but the pace of growth has slowed again according to the S&P CoreLogic Case-Shiller national home price index (not seasonally adjusted) for March released Tuesday. The year-over-year increase of 3.9% was more than two full percentage points below the 6.5% increase posted in March of 2018 and the slowest growth in nearly seven years. Month over month, the index dropped from 4.0% in February. March was the 12th straight month that home prices have grown more slowly than they did a year ago.
Some cities continue to see sharp increases, but these too are slowing down. Las Vegas home prices are 8.2% higher than they were a year ago, while Phoenix showed an increase of 6.1% and Tampa an increase of 5.3%. The U.S. city with the smallest annual price gain was San Diego, where prices increased by 1.3%.
On a seasonally adjusted basis, the consensus economists’ estimate called for the national average home price to rise by 2.5% year over year. The actual 12-month increase came in at 3.7%.
In all U.S. cities included in the 20-city home price index, March house prices rose 2.7% year over year, with 16 of 20 posting non-seasonally adjusted month-over-month price decreases. On a non-seasonally adjusted basis, prices rose 0.2% month over month on the 20-city index.
David M. Blitzer, the S&P index committee chair, said:
The patterns seen in the last year or more continue: year-over-year price gains in most cities are consistently shrinking. Double-digit annual gains have vanished. … Given the broader economic picture, housing should be doing better. … The difficulty facing housing may be too-high price increases. At the currently lower pace of home price increases, prices are rising almost twice as fast as inflation: in the last 12 months, the S&P Corelogic Case-Shiller National Index is up 3.7%, double the 1.9% inflation rate. Measured in real, inflation-adjusted terms, home prices today are rising at a 1.8% annual rate. This compares to a 1.2% real annual price increases in housing since 1975.
Mortgage loan rates had slipped to 4.05% Tuesday morning, according to Mortgage News Daily, extending its monthly decline from a top-tier rate of 4.29%.