Home price growth has clearly slowed down in recent months as the housing market cools after a near six-year hot streak.
Now, a report released by Fitch Ratings this week details just how much the market has slowed, revealing a full percentage point decline from the previous quarter.
U.S. home prices nationwide grew by approximately 3% annually in first quarter of 2019, compared with 4% the previous quarter, prompting Fitch to describe the pace as moving “from a gallop to a trot.”
But Fitch predicts prices will sold still at 3%.
“Annual home price growth is now at the slowest rate in seven years, but the slowdown should plateau due to the recent drop in interest rates and the limited supply of new homes,” said Managing Director Grant Bailey in Fitch’s quarterly sustainable home price report.
The 30-year fixed mortgage rate has fallen to 3.82%, its lowest level in nearly two years, the report revealed. And, the monthly supply of new residential homes fell to under six months through April.
Fitch also said only a limited number of housing markets appear to be at risk for a price correction.
Its report pinpointed overvalued housing pockets concentrated in Texas, Florida, and California. It also said home price growth has slowed significantly in Los Angeles, where prices fell 1.3% annually last quarter.
But Las Vegas wins the title of the most overvalued housing market in the country, Fitch said, with homes there overvalued by 20%-24%.