Want more evidence the U.S. housing market is losing ground? Home price gains continue to slow in many of the largest metro areas, according to a new S&P CoreLogic Case-Shiller nationwide survey.
The 5.5 percent home price increase in September was down slightly from the 5.7 percent gain the previous month, according to the report. The 5.5 percent gain was the smallest since January 2017.
Both the survey’s 10-city and 20-city composites performed worse than the national average, meaning price gains were strongest outside major markets.
Los Angeles saw a 5.5 percent home price increase, while Miami had a 4.6 percent bump and Chicago had a 3 percent rise.
New York’s 2.6 percent year-over-year increase was the weakest of all major cities.
Some of the markets that are now seeing some of the strongest gains, like Las Vegas, Phoenix and Tampa, Florida; saw the most significant drops in home prices during the financial crisis.
Other recent figures point to a slowdown across the board. Sales of existing and new single-family homes were down 9.3 percent compared their peak value in November 2017. Existing home sales have declined on an annual basis for eight straight months.
Housing starts are also down and homebuilder confidence in the market dropped to its lowest point in two years earlier this month.
David Blitzer of S&P Dow Jones Indices attributed the slowdown in part to a recent increase in mortgage rates. The national average for a 30-year fixed-rate loan is 4.9 percent, a full percentage point higher than it was a year ago. That could be cause for potential buyers to pull back.
The higher rates also helped push mortgage applications to a four-year low. As those applications slow, more Americans are tapping their home equity. Homeowners took out $14.6 billion against their homes in the third quarter.