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Home prices go up as affordability trends continue downward.

Home prices in 20 U.S. cities continued to advance at a solid, albeit a touch slower, pace in April, reflecting lingering inventory shortages, according to S&P CoreLogic Case-Shiller data released Tuesday. 20-city property values index increased 6.6% y/y (est. 6.8%), after rising 6.7% y/y (prev. 6.8%). National home-price gauge advanced 6.4% y/y after 6.5% seasonally adjusted 20-city index rose 0.2% m/m (est 0.4%), the smallest gain since July. The report indicates a respite in the steady acceleration in property values since the end of 2014. Seattle, San Francisco and Las Vegas led the gain among cities posting a year-over-year advance in April. Price gains in this recovery have been supported by healthy demand amid a strong labor market and improving consumer finances. At the same time, there’s a persistent shortage of available and affordable listings, and borrowing costs have risen this year. Property-price appreciation that’s outpacing wage growth also is a headwind for younger or first-time buyers, though a positive for homeowners’ equity. “The favorable economy and moderate mortgage rates both support recent gains in housing,” David Blitzer, chairman of the S&P index committee, said in a statement. “One factor pushing prices up is the continued low supply of homes for sale. The months-supply is currently 4.3 months, up from levels below 4 months earlier in the year, but still low.” All 20 cities in the index showed year-over-year gains, led by a 13.1% increase in Seattle and a 12.7% advance in Las Vegas. After seasonal adjustment, Detroit had the biggest month-over-month rise at 1.3%, followed by a 1.1% increases in both Las Vegas and Seattle. Home prices fell in New York, San Francisco and Washington from the prior month.

Copyright 2018 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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