Home price gains in 20 U.S. cities decelerated in March for a 12th straight month, suggesting that sellers’ demands have made properties unaffordable for many.
The S&P CoreLogic Case-Shiller index of property values increased 2.7% from a year earlier, the slowest since August 2012, data showed Tuesday. That was slightly above estimates, though the monthly gain of 0.1% missed all analyst forecasts. Nationally, home price gains slowed to a 3.7% pace.
Sellers are still struggling to attract buyers in some areas despite lower mortgage rates and more sustained wage gains, with prices rising at less than half the pace of a year ago. Further weakness would suggest residential investment could drag down economic growth for yet another quarter, though eventually more attractive prices should help the market recover.
While all 20 cities in the index showed year-over-year gains, five were below 2%: Los Angeles, San Diego, San Francisco, Chicago and Seattle, which a year ago posted a 13% increase. The Times previously reported that home prices in Southern California dipped for the month for the first time since 2012.
Las Vegas led the nation in March with an 8.2% gain, followed by Phoenix. Prices in 14 cities rose from the prior month on a seasonally adjusted basis, while three were down and three were unchanged.
Other data on housing have been soft or mixed. A government report last week showed the median price for a new U.S. home increased in April to the highest level since December 2017 while sales eased from the prior month. Existing home sales, which make up the majority of the U.S. housing market, unexpectedly fell in April while building permits for new single-family homes fell to the lowest level in almost two years.
“Given the broader economic picture, housing should be doing better,” David Blitzer, chairman of the S&P index committee, said in a statement. “Measures of household debt service do not reveal any problems and consumer sentiment surveys are upbeat. The difficulty facing housing may be too-high price increases,” which continue to outpace inflation, he said.
An index by the Federal Housing Finance Agency showed prices rose 4.9% in March from a year earlier, according to a separate report Tuesday. The gain from February was 0.1%, lower than the median estimate of 0.2%.