The US housing price growth has slowed down, the Federal Reserve can now "safely cut interest rates"
New Deal democrat said that the latest home sales index shows a slowdown in the growth rate of house prices, with the FHFA index and Case-Shiller index only rising by 2.3% this year, with an annualized growth rate of 4.6%, which has returned to pre-pandemic levels
The latest housing sales index shows that housing price inflation continues to decelerate, giving the Federal Reserve more room to cut interest rates.
On August 27th, New Deal democrat published a blog stating that the housing sales indexes from FHFA and Case-Shiller are performing well, showing signs of a slowdown in housing prices.
The FHFA U.S. House Price Index (Purchase Only House Price Index for the U.S.) shows that the average price remained unchanged in May, followed by a 0.1% decrease in the three-month average price as of June. The S&P CoreLogic Case-Shiller U.S. National Home Price Index shows a 0.2% increase in prices for the same period, but the Case-Shiller House Price Index typically lags by one month. Except for the end of 2022, this is the lowest monthly price change for these two indexes since the lockdown period during the pandemic.
On a year-over-year basis, both indexes have increased by 5.4%. This is the lowest reading for the Case-Shiller index since December last year and for the FHFA index since July last year.
In the first half of this year, the growth rates of these two indexes were only 2.3%, with an annualized growth rate of 4.6%, a pace that was quite common before the pandemic.
New Deal democrat stated that the housing price index leads the housing portion of the overall CPI (i.e., owner's equivalent rent) by 12 to 18 months, indicating that housing prices are expected to continue to slow down.
