(Bloomberg) -- Home prices in 20 U.S. cities rose in February at the slowest pace since 2012, decelerating for an 11th straight month, as sellers continue to make properties more affordable to lure buyers.
The S&P CoreLogic Case-Shiller index of property values increased 3 percent from a year earlier, matching analyst projections, after 3.5 percent in the prior month, data showed Tuesday. Nationally, home prices decelerated to a 4 percent increase, also the smallest gain since 2012.
Key Insights
- The figures reflect how the housing market’s slump last year extended to the start of 2019. Despite steady wage gains and lower borrowing costs, buyers have still been holding out for more affordable properties.
- At the same time, price gains may pick up in the coming months amid signs of strength in demand. New home sales climbed in March at the fastest pace since 2017, while applications for loans to buy homes recently hit the highest weekly level in almost nine years.
- Data on pending home sales for March, due later on Tuesday, will give a better sense of momentum in the housing market in the first half of the year. Analysts project contract signings rose for the second time in three months.
Official’s View
“The pace of increases for home prices continues to slow,” David Blitzer, chairman of the S&P index committee, said in a statement. “Prices generally rose faster in inland cities than on either the coasts or the Great Lakes.”
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- The seasonally adjusted 20-city index advanced 0.2 percent in February from the prior month, matching estimates. Economists watch the year-on-year gauge to better track trends, which at the moment show home-price gains slightly below wage increases.
- All 20 cities in the index showed year-over-year gains, led by a 9.7 percent increase in Las Vegas and 6.7 percent in Phoenix.
- Increases have slowed considerably over the past year in California, with San Francisco, San Diego and Los Angeles all recording annual gains of below 2 percent. Seattle, another previously hot city, showed an advance of just 2.8 percent.
- Prices in 17 cities rose from the prior month on a seasonally adjusted basis, led by Tampa.