WASHINGTON (AP) — U.S. home prices rose at a slower pace in November, as sales have tumbled and affordability has deteriorated for many would-be buyers.
The S&P CoreLogic Case-Shiller 20-city home price index grew 4.7 percent from a year earlier, dropping off from a 5 percent annual increase in October, according to a Tuesday report.
Home sales drifted downward for much of 2018, causing homes to sit on the market longer and price growth to slip. Buyers have found it difficult to afford a home due to a shortage of properties at a median price of roughly $250,000, last year’s rising mortgage rates and roughly six years of home price growth exceeding wage gains.
“Home prices are still rising, but more slowly than in recent months,” says David M. Blitzer, managing director and chairman of the index committee at S&P Dow Jones Indices. “The pace of price increases are being dampened by declining sales of existing homes and weaker affordability.”
The Las Vegas metro area posted the largest price gains at 12 percent, followed by Phoenix at 8.1 percent and Seattle at 6.3 percent. All 20 of the metro areas tracked by the index reported price gains, with Washington, DC posting the slowest gain at 2.7 percent.
Still, 2019 has offered consumers some relief as the average 30-year mortgage rate has dipped to 4.45 percent from a recent peak of nearly 5 percent. This could help to boost demand after sales declined last year.
The National Association of Realtors said last week that sales of existing homes in 2018 fell 3.1 percent from the prior year to 5.34 million units, the lowest level since 2015.