U.S. home prices rise modestly in February, housing to plateau at current levels in 2019

U.S. home prices were up modestly in the month of February. The S&P CoreLogic Case-Shiller survey showed that home prices rose 0.2 percent sequentially and 3 percent on a year-on-year basis. On annual basis home price appreciation has decelerated from 6.7 percent in March 2019 to its current 3 percent print. A range of home price surveys are in line with slower momentum in home prices inflation. At a city level, prices dropped in three of the 20 major metropolitan areas.

The deceleration in home price appreciation is viewed as a part of a wider easing in the housing market that is also evident in starts and sales activity, noted Barclays in a research report. The deteriorating home affordability and rising mortgage interest rates helped in slowing the housing market in 2018 and represent headwinds for this year.

“We expect housing to plateau at current levels throughout 2019, rather than deteriorate sharply. This reflects our view that home affordability should improve by the gradually rising wages and the continued pickup in employment that both support household incomes”, said Barclays in a research report.

Moreover, the recent easing in mortgage interest rates should also be a tailwind to the housing sector. Furthermore, the balance between demand and supply of housing as finely matched, which should avert a sharp correction in home prices, added Barclays.

At 17:00 GMT the FxWirePro's Hourly Strength Index of US Dollar was highly bearish at -171.962 more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex