The S&P/Case-Shiller 20 city index for home prices rose again in the most recent report out this morning for October. Ignoring the fact that the information is two months old, thus out of date as soon as it comes out, it showed a continuing trend of home price increase weakness. Prices as of October are still increasing but for the third month in a row that increase is shrinking. The rise is still 5% year over year but that was down .4% month over month.
Home prices continue to rise faster than incomes but not nearly as much as it was a few years ago and more recent information suggests prices are currently much weaker than they were in October. Salaries are rising and it looks like home prices will actually be shrinking soon. That might not make much difference for home buyers as mortgage rates are rising.
Housing is not going to rebound and very likely will keep softening into 2019. It all comes down to affordability and that is going to get worse if the FED keeps increasing interest rates as they have suggested they would into next year. 2019 will be a buyers’ market switching from being a sellers’ market for the last number of years.