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Nov 27, 2018

House price growth slows to nearly two-year low as Case-Shiller makes the slowdown official

Andrea Riquier



Silvia Ascarelli / MarketWatch
We’re likely not in for a repeat of the housing crash, but more price cuts are likely to appear throughout the country.
The numbers: The S&P/Case-Shiller 20-city index was flat on a seasonally adjusted basis in September compared to August, and was 5.1% higher compared to its level a year ago, the lowest annual increase in nearly two years.
The Econoday consensus was for a 0.3% monthly increase for the 20-city index and a 5.3% yearly increase.
Tuesday’s Case-Shiller report covers the three-month period ending in September.
What happened: House prices are coming back to earth across the country as sellers and buyers reach an uneasy truce. The 5.1% annual increase is the slowest pace of appreciation since late 2016, but it’s still nearly double the rate of wage gains.
Even though economists have long expected the housing market to reach a lower equilibrium level, they didn’t expect prices to decelerate so sharply.
Big picture: The west is still the best, and Las Vegas is on fire. The city that was once one of the poster children of the housing crash saw prices gain 13.5% for the year this month. It was followed by San Francisco and Seattle. But Seattle’s fortunes may be reversing; prices there lost the most on a monthly basis in September.
Nine cities saw prices decline in September compared to August.
Metro area Monthly change 12-month change
Atlanta 0.2% 5.7%
Boston 0.0% 5.0%
Charlotte 0.2% 5.2%
Chicago -1.01% 3.0%
Cleveland 0.3% 5.2%
Dallas 0.0% 4.3%
Denver -0.1% 7.3%
Detroit 0.1% 6.3%
Las Vegas 0.6% 13.5%
Los Angeles -0.2% 5.5%
Miami 0.2% 4.6%
Minneapolis 0.8% 6.0%
New York -0.1% 2.6%
Phoenix 0.8% 7.2%
Portland -0.1% 5.1%
San Diego -0.3% 4.0%
San Francisco 0.0% 9.9%
Seattle -1.3% 8.4%
Tampa 0.6% 6.7%
Washington -0.2% 2.9%
Related: A tax break to hasten gentrification? Housing market’s Opportunity Zones may miss their target
What they’re saying: The housing market is losing some steam. ShowingTime, a fintech that enables more than 4 million property showings per month, said buyer traffic was 5% lower in October than a year ago, the third straight month of annual declines. Showing activity was lower in the South compared to a year ago for the first time in 12 months, the company said. In the West, showings were lower by double digits for the second month in a row.
“Home prices plus data on house sales and construction confirm the slowdown in housing,” said David Blitzer, managing director and chairman of the index committee at S&P Dow Jones Indices.
Market reaction: The U.S. 10-year Treasury note TMUBMUSD10Y, +0.27%  , which sets the tone for mortgage rates, slid last week, helping bring rates for home loans down at the fastest pace in four years.
Also read: This chart shows fizzling momentum in the housing market

Source: MarketWatch

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