The price of an average home in the U.S. rose 4.3 percent year-over-year in January, falling from 4.7 percent annual growth in December, according to the monthly Case-Shiller U.S. National Home Price NSA Index released Tuesday.
While home values continued to rise, growth has been slowing steadily across the country over the past six months. Growth has not been this low in nearly four years. The composite of the country’s 20 biggest cities gained 3.6 percent year-over-year, down from 4.1 percent in December.
Many experts predict the trend will continue well into 2019 — with the growth in home prices continuing to dip lower in the coming months.
“The last time it advanced this slowly was April 2015,” said David Blitzer, managing director of the S&P Dow Jones Indices, in a statement. “In 16 of the 20 cities tracked, price gains were smaller in January 2019 than in January 2018.”
Regionally, Las Vegas experienced the strongest year-over year gains, with home values growing by 10.5 percent. That said, it was the only city nationwide to see double-digit growth, with most major cities saw seeing only modest growth. Mortgage rates, meanwhile, fell slightly after November’s peak of 5 percent — hitting a rate of 4.28 percent.
“Again, the two hottest markets were out West, but the third market was from the Midwest — a sign that prices are slowing in Western markets,” Danielle Hale, chief economist at Realtor.com, said in a statement. ”[…] News of Amazon’s impending arrival has helped boost the Washington D.C. market from last place in November, to 19th place in December, and now 15th place in January as home prices increased 3.1 percent there.
But as the numbers show, analysts expect an increase in sales but not necessarily the kind of affordability many homebuyers hope for. Any drop in prices will be slow in coming and small compared to income stagnation.
“We continue to expect existing home sales to decline slightly compared to 2018 throughout the year, and for new home sales to track similarly,” said Keller Williams Chief Economist Ruben Gonzalez in a statement. “We expect year-over-year price growth to remain in the low single digits, though lower mortgage rates will provide some upward pressure on prices, perhaps halting the slowing of increases as we move closer to summer.”