US home price growth shows signs of slowing
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Home price growth in the United States may finally slow down.
Standard & Poor’s said on Tuesday that its national S&P CoreLogic Case-Shiller home price index posted an annual gain of 19.8% in August, the same as in July, remaining at a record high. The 20-City Composite posted an annual gain of 19.7%, down from 20% a month earlier. 20-City’s results were slightly below analysts’ expectations of a 20% annual gain, according to Bloomberg consensus estimates.
âIn August 2021, the National Composite Index rose 19.84% from the levels of the previous year, slightly ahead of the 19.75% increase in July. This slowdown was also evident in our 10 and 20 city composites, âsaid Craig J. Lazzara, Managing Director and Global Head of Index Investment Strategy at S&P DJI, in a press release. âEach of our urban and composite indexes is at its highest historical level, and year-over-year price growth continues to be very strong, although moderating somewhat from levels in the last month. The price increases were again widely distributed with all 20 cities increasing, albeit in most cases at a slower pace than a month ago. “
The results are in line with expectations. Last week, the National Association of Realtors (NAR) reported that the median price of existing homes in September reached $ 352,800, up 13.3% from a year ago, slightly down from in the previous month and in the third consecutive month of decline.
Once again, Phoenix topped the 20-City Composite, posting an annual gain of 33.3%, followed by San Diego and Tampa, posting year-over-year gains of 26.2% and 25 , 9%, respectively. This is the 27th consecutive month that Phoenix has recorded the fastest rate of home price growth.
âOn the one hand, home buyers have continued to face a competitive market in which home prices have risen at a double-digit rate compared to a year ago. On the other hand, the rate of price growth should slow down somewhat, âDanielle Hale, chief economist at Realtor.com, said in a statement ahead of the results. âIn the future, the conditions buyers face depend mainly on two things. : mortgage rates and housing supply. The average mortgage rate for a 30-year fixed-rate loan rose 10 basis points from 2.77% to 2.87% in August and topped 3.0% with no sign of slowing since, limiting the ability of some buyers to push the house. “
In addition, the reduction in the number of houses available for sale should help curb the growth in house prices. Lawrence Yun, chief economist of NAR, recently said that while stocks are still tight, the declines are not as severe. By December 2021 or January 2022, he expects stocks to “pass the cap and rise”.
âData for August also suggests that house price growth, while still very strong, may start to slow,â Lazzara said.
Amanda Fung is a writer at Yahoo Finance.
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