Case-Shiller: Prices Slow, Giving Homebuyers Much-Needed Relief

By Suzanne De Vita


With the cooling cycle in full swing, home prices are significantly slowing.
 
Annual appreciation downshifted to 4.3 percent this January, and to 0.2 percent from the end of the year, according to the S&P CoreLogic/Case-Shiller Indices, newly released this week.
 
For homebuyers, calmer conditions are a needed respite. After contending with impractical prices for years—especially first-time homebuyers, who have had few options in their price range—dynamics are improving.
 
"January kicked the new year off with yet another month of slowing price growth," says Ralph McLaughlin, deputy chief economist and executive of Research and Insights at CoreLogic. "This is a strong signal that the home-buying season this spring will look quite different than in recent years. While sellers still hold a good set of cards, buyers in some high-price coastal markets have recently drawn aces with rising inventory, increasing price cuts and longer time on the market, helping them win some hands. As a result, we can expect buyers and sellers to be a little better matched at the negotiating table this spring."
 
According to David M. Blitzer, chairman and managing director of the Index Committee at S&P Dow Jones Indices, appreciation has hit an inflection point.
 
"In the year to January, the S&P CoreLogic Case-Shiller National Index rose 4.3 percent, two percentage points slower than its pace in Jan. 2018," says Blitzer. "The last time it advanced this slowly was April 2015."
 
The cooldown has not yet led to meaningful progress on the sales side, Blitzer notes, but an additional factor could help spur transactions.
 
"Mortgage rates are as important as prices for many homebuyers," Blitzer says. "Mortgage rates climbed from 3.95 percent in Jan. 2018 to a peak of 4.95 percent in Nov. 2018. Since then, rates have dropped to 4.28 percent as of mid-March. Sales of existing single-family homes slid gently downward from the 2017 fourth quarter until January of this year before jumping higher in Feb. 2019. Home sales' annual rate dropped from 5 million units in Feb. 2018 to 4.36 million units in Jan. 2019 before popping to 4.94 in February. It remains to be seen if recent low mortgage rates and smaller price gains can sustain improved home sales."
 
The complete data for the 20 markets measured by S&P:
 
Atlanta, Ga.
MoM: -0.3%
YoY: 4.9%
 
Boston, Mass.
MoM: -0.4%
YoY: 4.6%
 
Charlotte, N.C.
MoM: 0.3%
YoY: 5.1%
 
Chicago, Ill.
MoM: -0.5%
YoY: 2.4%
 
Cleveland, Ohio
MoM: -0.6%
YoY: 3.8%
 
Dallas, Texas
MoM: 0.1%
YoY: 3.8%
 
Denver, Colo.
MoM: 0.2%
YoY: 5%
 
Detroit, Mich.
MoM: -0.1%
YoY: 5%
 
Las Vegas, Nev.
MoM: -0.3%
YoY: 10.5%
 
Los Angeles, Calif.
MoM: -0.3%
YoY: 2.9%
 
Miami, Fla.
MoM: 0.3%
YoY: 4.8%
 
Minneapolis, Minn.
MoM: -0.4%
YoY: 5.1%
 
New York, N.Y.

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