Housing “diet” means better home buying conditions come spring, expert says

Slow growth means super spring

Home price growth recently slowed to its lowest rate since January 2017 — but according to one expert, it doesn’t mean the market’s bottoming out. In fact, it may even indicate prime home buying conditions come spring.

Price growth on the decline

The most recent S&P CoreLogic Case-Shiller National Home Price Index shows home prices jumped just 5.5 percent in October. That’s the seventh month in a row price growth has waned and its lowest rate in nearly two years.

Home price growth also declined in 10 of the nation’s top 20 metro areas.

Growth was particularly slow in places like Washington, D.C., New York, Chicago, San Diego and Dallas. All five cities saw prices increased less than 4 percent for the month.

Healthier home buying conditions

According to Ralph B. McLaughlin, deputy chief economist and executive of research and insights for CoreLogic, the stats — coupled with declining mortgage rates and increasing construction — simply indicate the market is “cooling.”

“October marked another month of slowing home-price appreciation, but recent signs point to a gentle softening of the housing market, rather than a crash landing,” McLaughlin said. “For example, existing home sales increased for the second consecutive month, new building permits ticked up to a seven-month high and mortgage rates are now at three-month lows. While the market is undoubtedly cooling, we believe it is a healthy respite for would-be homebuyers who have been stymied by increasing prices, falling inventory and rising mortgage rates over the past several years.”

Home price growth, inventory shortages continue to let up

McLaughlin went on to call the trends a “healthy diet,” that will allow the market to “be in better shape for the home buying season come spring.”

“It’s important to look at the bigger picture,” McLaughlin said. “Slowing price appreciation is still appreciation, and the current rate is more than double that of inflation. This continued growth, coupled with rising inventory and falling mortgage rates, suggests the bottom isn’t falling out of the housing market.”

Home prices predicted to keep dropping; many markets still overvalued

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