Growth in Home Prices Ta­pers Off

L'Opinion - - Donald Trump, What Else ? - Lau­ra Ku­sis­to

An­nual home-price gains fell be­low 6% for the first time in a year in Au­gust, ano­ther si­gn that the slow­down in the hou­sing mar­ket is be­co­ming wi­des­pread and is li­ke­ly to per­sist in the months to come.

The S&P Co­reLo­gic Ca­seS­hil­ler Na­tio­nal Home Price In­dex, which mea­sures ave­rage home prices in ma­jor me­tro­po­li­tan areas across the na­tion, rose 5.8% in the year en­ding in Au­gust, down from a 6% yea­ro­ver-year in­crease re­por­ted in Ju­ly.

Price gains ac­ce­le­ra­ted for most of the last two years, gro­wing si­gni­fi­cant­ly fas­ter than both in­comes and in­fla­tion. Au­gust mar­ked the fifth straight month of de­ce­le­ra­ting price gains, as in­ter­est rates have ri­sen and in­ven­to­ry in some mar­kets has been gro­wing.

Home buyers “must be brea­thing a col­lec­tive sigh of re­lief that home price growth fi­nal­ly has slo­wed.” said Sky­lar Ol­sen, di­rec­tor of eco­no­mic re­search and ou­treach at Zillow. Ms. Ol­sen said the slo­wing ap­pre­cia­tion “is a si­gn that fierce com­pe­ti­tion is dying down.”

The Case-Shil­ler 10-ci­ty in­dex gai­ned 5.1% over the year, down si­gni­fi­cant­ly for the se­cond straight month from 5.5% the prior month. The 20-ci­ty in­dex gai­ned 5.5%, down from 5.9% the pre­vious month.

Four­teen out of 20 ci­ties are sho­wing slo­wer price growth than a year ear­lier.

Las Ve­gas had the fas­test home price growth in the coun­try for the third straight month, at 13.9%, fol­lo­wed by San Fran­cis­co, where prices grew 10.6%. Seat­tle, where real­tors have re­por­ted a si­gni­fi­cant pull­back in buyer de­mand in recent months, fell to third place with a 9.6% an­nual gain in prices.

Da­vid Blit­zer, ma­na­ging di­rec­tor at S&P Dow Jones In­dices, said that even though there is a pull­back in the hou­sing mar­ket there are no si­gns that the cur­rent weak­ness will be­come a re­peat of the cri­sis in 2008 be­cause mort­gage de­fault rates re­main low. “Wi­thout a col­lapse in hou­sing fi­nance like the one seen 12 years ago, a crash in home prices is un­li­ke­ly,” he said.

More than five years of ra­pid­ly ri­sing prices, com­bi­ned with hi­gher mort­gage rates are ma­king homes in­crea­sin­gly unaf­for­dable for buyers. Rates for a 30-year mort­gage ave­ra­ged 4.86% last week, up near­ly a full per­cen­tage point from the be­gin­ning of the year, Fred­die Mac said last Thurs­day. Be­cause Case-Shil­ler home-price da­ta lags be­hind by a couple of months, it doesn’t yet re­flect the most recent run-up in rates.

“Cou­pled with mort­gage rate in­creases that pi­cked up steam in Sep­tem­ber, hi­gher prices are sti­fling home sales as more buyers are pri­ced out of the mar­ket,” said Da­nielle Hale, chief eco­no­mist for Real­tor. com. Most sec­tors of the hou­sing mar­ket are slo­wing, in­clu­ding new home sales and hou­sing starts.

Sales of pre­vious­ly ow­ned U.S. homes fell 3.4% in Sep­tem­ber from the pre­vious month to a sea­so­nal­ly ad­jus­ted an­nual rate of 5.15 mil­lion, the Na­tio­nal As­so­cia­tion of Real­tors said Fri­day.

Fe­wer people are at­ten­ding open houses and in­ven­to­ry le­vels are ri­sing, promp­ting La­wrence Yun, the group’s chief eco­no­mist, to ack­now­ledge there has been a “clear shift” in the mar­ket.

SI­PA PRESS

The S&P Co­reLo­gic Case-Shil­ler Na­tio­nal Home Price In­dex, which mea­sures ave­rage home prices in ma­jor me­tro­po­li­tan areas, rose 5.8% for the year en­ded in Au­gust.

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