March US home-price growth at slowest rate in seven years
US home-price gains in March decline despite a strong economy.
US home-price gains increased in March, but at a sluggish pace. Home-price growth rose by 3.7%, down from 3.9% in February, according to the S&P CoreLogic Case-Shiller Indices.
Why are home-price gains falling?
Home-price gains are falling because of slowing growth in mostly western US cities like Seattle. Home-price gains fell for the 12th straight month in March.
While home-price gains have fallen, David M. Blitzer, managing director of the Index Committee at S&P Dow Jones Indices, has a positive outlook on the housing market.
‘Measures of household debt service do not reveal any problems and consumer sentiment surveys are upbeat. The difficulty facing housing may be too-high price increases,' said Blitzer.
Blitzer also noted that the strong economy should be causing home-price gains to rise at a faster pace.
‘Given the broader economic picture, housing should be doing better. Mortgage rates are at 4% for a 30-year fixed rate loan, unemployment is close to a 50-year low, low inflation and moderate increases in real incomes would be expected to support a strong housing market,’ said Blitzer.
What’s next for the US housing market?
US housing numbers have been down recently, as new home sales have fallen. Despite the decline in home sales, Lawrence Yun, the National Association of Realtors’ chief economist, has an optimistic view of the statistics. Yun said in a statement that an increase in housing inventory has led to a buyers’ market. He also advises sellers to exercise more patience when putting their homes on the market.
‘We see that the inventory totals have steadily improved and will provide more choices for those looking to buy a home. When placing their home on the market, home sellers need to be very realistic and aware of the current conditions,’ said Yun.
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