Home prices rose at a slower pace in March, signaling the U.S. housing market is continuing to cool down despite declining mortgage rates and low unemployment.
The S&P CoreLogic Case-Shiller National Home Price, which looks at home prices in large U.S. markets, rose 3.7 percent in the year ending in March, a decrease from 3.9 percent in February, according to the Wall Street Journal.
Last year, home price growth started declining amid a rise in mortgage rates.
But economists projected that falling mortgage rates this year would renew interest in home buying, given that purchasing a home would be more affordable. It appears that homebuyers have yet to return to the market.
Experts say the problem remains affordability. Home prices have risen beyond what people are able to pay. At the same time, homebuilders are challenged with building affordable homes due to rising supply and labor costs.
Cities on the West Coast are seeing the most significant slowdown in home prices. Last year, Seattle and San Francisco had double-digit annual price gains. Now, prices in both places are growing at about 1 percent, the Journal reported.
Chicago, New York and Los Angeles saw price growth of about 1 to 2 percent, while Miami was more higher, at 4.3 percent, according to the report.
There have been numerous indicators that the housing market is headed for a rough year in 2019.
In April, existing home sales recorded their 14th straight month of annual declines, dropping 4.4 percent since April 2018, according to the Journal. [WSJ] — Keith Larsen