"A slower price appreciation, coupled with lower mortgage rates in 2019, should help homebuyers whose prices are not too expensive," said Danielle Hale, chief economist at Realtor.com . "choke, we could see the slow start of 2019 starting to pick up later in the year."
Las Vegas, Phoenix and Atlanta recorded the highest gains from one year to the other among the 20 cities. In December, prices in Las Vegas jumped 11.4% year-over-year, followed by Phoenix with an increase of 8.0% and Atlanta with an increase of 5.9%. Three of the 20 cities recorded larger price increases between December 2018 and November 2018.
While lower mortgage rates could certainly boost the sales market, home prices are very high in most major metropolitan markets. Affordability has been at a low level for about ten years and home sales were down sharply at the end of 2018. Prices are generally lower than sales. It is therefore likely that price increases will continue to decline until sales rise sharply.
Housing construction remains below historic norms, particularly due to strong demand. Single-family housing starts fell in December, according to the latest data released Tuesday from the US Census. Although home builders' sentiment is higher, thanks to lower interest rates, builders still do not have the confidence to really increase their production.
Existing home sales declined 8.5% in January from January 2018, according to the National Association of Realtors. Houses stay longer in the market and sellers reduce their prices more often.