S&P: Home Prices Continue Modest Growth

S&P Dow Jones Indices, New York, said its S&P CoreLogic Case-Shiller Indices showed home prices continue to increase at a modest rate across the U.S through the end of 2019.

Year over year, the S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index reported a 3.8% annual gain in December, up from 3.5% in November. The 10-City Composite annual increase rose by 2.4%, up from 2.0% in November. The 20-City Composite posted a 2.9% year-over-year gain, up from 2.5% in November. 

Phoenix, Charlotte and Tampa reported the highest year-over-year gains among the 20 cities. In December, Phoenix led with a 6.5% year-over-year price increase, followed by Charlotte at 5.3% and Tampa at 5.2%. Twelve of the 20 cities reported greater price increases in the year ending December from November.

Month over month, the National Index posted an increase of 0.1%, while the 10-City Composite posted an 0.1% increase and the 20-City Composite was unchanged. After seasonal adjustment, the National Index posted a month-over-month increase of 0.5%, while the 10-City and 20-City Composites both posted 0.4% increases. In December, 10 of 20 cities reported increases before seasonal adjustment while 19 of 20 cities reported increases after seasonal adjustment.

“The U.S. housing market continued its trend of stable growth in December,” said Craig J. Lazzara, Managing Director and Global Head of Index Investment Strategy with S&P Dow Jones Indices. “December’s results bring the National Composite Index to a 3.8% increase for calendar 2019. This marks eight consecutive years of increasing housing prices (an increase which is echoed in our 10- and 20-City Composites). At the national level, home prices are 59% above the trough reached in February 2012, and 15% above their pre-financial crisis peak. Results for 2019 were broad-based, with gains in every city in our 20-City Composite.  

Frank Nothaft, Chief economist with CoreLogic, said the drop in mortgage rates during the past week has improved payment affordability and will bring prospective buyers into the market. “If rates stay low into the spring, we expect sales volume to be the highest in 13 years, and annual home price growth to quicken,” he said. The report said as of December, average home prices for metros within the 10-City and 20-City Composites are back to their winter 2007 levels.