Data released today for November 2019 show that home prices continue to increase at a modest rate across the U.S.
“The U.S. housing market was stable in November,” says Craig J. Lazzara, Managing Director and Global Head of Index Investment Strategy at S&P Dow Jones Indices. “With the month’s 3.5% increase in the national composite index, home prices are currently 59% above the trough reached in February 2012, and 15% above their pre-financial crisis peak.”
Phoenix kept the top spot for the sixth consecutive month with an annual gain of 6% for November. Charlotte and Tampa rose by 5%.
Real, inflation-adjusted house prices in metropolitan San Francisco, however, fell 2% from November 2018 to November 2019. The nominal S&P CoreLogic Case-Shiller Home Price Index for San Francisco was flat over the 12 months but when you adjust for inflation San Francisco house prices fell slightly.
It was the same story in Chicago, real house prices fell 2%. New York real prices fell 1%.
Los Angeles prices bounced back a bit in November — up 1% — after seeing no gains in October.
Upward Price Momentum Still Slowing
“High-cost markets, where the lack of affordable housing remains a critical issue, had the largest deceleration in price growth from one year ago, with prices almost stagnant in the San Francisco and New York areas on an annual basis,” writes Dr. Frank Nothaft, chief economist for CoreLogic. “New York and Illinois were the two states with the largest population loss in 2019, according to the Census’ estimates. This factor added to the sluggish prices in New York and in Chicago.”
Although, prices in most markets are still increasing, the increases are getting smaller. For the U.S. as a whole, houses prices are increasing one percentage point more slowly than the year before.
Last month none of the 20 metros covered by the Case-Shiller Index had appreciated more over the last 12 months than they did over the previous 12 months. This new November data, however, shows that house prices in Washington DC and San Diego increased one percentage point faster in the last 12 months than the previous 12 months.
Price Appreciation Trends
Some previously hot markets like Seattle, Las Vegas and San Francisco saw huge slowdowns in appreciation starting in 2018. House prices started to rebound in those cities in August and September.
The general consensus among economists is the steep fall in mortgage rates from November 2018 to September 2019 was starting to have an effect on prices. The rates on 30-year fixed rate mortgages fell from almost 5% in November 2018 to around 3.6% now.
The U.S. Housing Market
Nationally, annual house price appreciation was running around 6% during 2017 and the first half of 2018 before it started to fade. After running at a 3% annual appreciation rate for several months in 2019, U.S. house price appreciation increased slightly in November. The falling mortgage earlier last year could have an impact for months into 2020.
“In nearly all cities, price growth was quicker for homes that were less expensive, highlighting the strong demand for affordably-priced homes and the limited supply available for sale in that price tier,” according to Dr. Nothaft of CoreLogic. As an example, homes with a sale price in the lowest one-third of the Phoenix market in November experienced an annual price increase of 9%, much more than for the Phoenix area as a whole.
Note. You can find interactive versions of these charts and several more vizzes for all 20 Case-Shiller metros here.
The November data is the latest available from Case-Shiller. The data is a 3-month moving average so what they call November is really the September-November average. It might be better to think of the November data as the data for the quarter ending in November 2019.