Home-price growth accelerated in November, in the latest sign the home-sales market is picking up steam after a slow start to 2019.
The S&P CoreLogic Case-Shiller National Home Price Index, which measures average home prices in major metropolitan areas across the nation, rose 3.5% in the 12 months to November, up from a 3.2% annual pace the prior month.
After a long period of price deceleration, if the current pace of price growth continues, it could offset some of the decreased costs home buyers are otherwise seeing with low mortgage-interest rates.
“November’s results were broad-based, with gains in every city in our 20-city composite,” said Craig Lazzara, a managing director at S&P Dow Jones Indices. “It is, of course, still too soon to say whether this marks an end to the deceleration or is merely a pause in the longer-term trend.”
National home price gains coincide with an increase in buying activity. December was the strongest month for existing home sales last year, with purchases increasing 3.6%. However, most economists say there is inadequate supply of homes available for sale, which is driving prices higher.
“Not since the 1980s have we seen supply this tight,” said Mark Fleming, an economist at First American Financial Corp. “That’s going to stay around in 2020 and the dynamic there will drive prices higher.” Home prices are still growing faster than private-sector workers’ wages, which climbed 3.1% in November from a year earlier, according to the Labor Department. The Case-Shiller 10-city index gained 2% over the 12 months to November. The 20-city index gained 2.6%. Fifteen of the cities in the 20-city index had larger price gains than in the previous month.
The cities where prices grew most on an annual basis most include Phoenix, Charlotte, N.C., and Tampa, Fla., which each saw prices rise 5% or more in November.
As of November, average home prices in the Case-Shiller indexes are now at the same level they were in the winter of 2007.
West Coast cities continued to see the weakest price growth in November, with San Diego and San Francisco showing prices increased just 0.3% and 0.2%, respectively, over October.