(Bloomberg) -- Home prices in 20 U.S. cities rose in December at the slowest pace in four years, continuing to decelerate as buyers balked at purchases amid still-elevated housing costs and a falling stock market.
The S&P CoreLogic Case-Shiller index of property values increased 4.2 percent from a year earlier, after a downwardly revised 4.6 percent in the prior month, data showed Tuesday, below the median estimate of economists. Nationally, home prices climbed 4.7 percent, the least since 2015.
Key Insights
- The increase in 20 cities, which also matched the smallest since 2012, adds to signs of weakness in housing despite a pullback in mortgage rates. Affordability remains a challenge for consumers who have also been whipsawed by stock markets, the trade war and a government shutdown. A report last week showed sales of previously owned U.S. homes fell last month to the weakest pace since November 2015.
- The seasonally adjusted 20-city index gained 0.2 percent from the prior month, also below projections. Economists watch the year-on-year gauge to better track trends, which show home prices continue to outpace wages.
- A separate report Tuesday showed that new-home construction in the U.S. slumped in December to the weakest pace since 2016, figures that were delayed by the government shutdown.
Official’s View
“A decline in interest rates in the fourth quarter was not enough to offset the impact of rising prices on home sales,” David Blitzer, chairman of the S&P index committee, said in a statement.
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- All 20 cities in the index still showed year-over-year gains, led by an 11.4 percent increase in Las Vegas and 8 percent in Phoenix. Seattle and Portland, Oregon, which had been leading in price gains earlier in 2018, have seen their paces slow sharply.
- The weakest gains were in San Diego and Washington, both under 3 percent.
- Prices in San Diego, San Francisco and Seattle fell from the prior month on a seasonally adjusted basis.
