Home Price Gains Decline Below 6 Percent for the First Time in a Year
Home price gains have begun to stabilize in many markets across the U.S. as home sales slow. The rise in mortgage interest rates combined with rising home prices have become just too much for some buyers, especially first-time home buyers. Not only are there fewer sales, the number of listings is on the rise, causing homes to stay on the market longer.
Nationally, home prices rose 5.8 percent in August 2018 as compared to the same time one year earlier, according to the S&P CoreLogic Case-Shiller home prices index. The 10-City Composite rose 5.1 percent annually, marking a decline from 5.5 percent in the previous month.
The 20-City Composite saw a 5.5 percent, year-over-year gain, a decrease from 5.9 percent during the previous month. As supply and demand within the housing market becomes more balanced, analysts expect that home prices will fall back to more normal levels of 3 to 4 percent annual gains.
Even as gains decline, some local markets are retaining price strength. Las Vegas, San Francisco, and Seattle experienced the largest annual gains among the 20-City index. In August 2018, Las Vegas home prices experienced a 13.9 percent year-over-year increase. San Francisco saw a 10.6 percent increase and Seattle had a 9.6 percent gain. Of the 20 cities in the index, four reported larger price increases as of the year ending in August 2018 versus the year ending in July 2018.
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