Home Price Appreciation Solid, But Slowing

Home-price appreciation is solid but did slow going into year end. The December FHFA index rose 0.4 percent, which is at the low end of expectations, while the year-on-year rate slowed 2 tenths to plus 5.7 percent. These results compare with greater strength in Tuesday's Case-Shiller report where, however, the year-on-year also slowed to 5.7 percent. Home prices had been inching up toward 6 percent last year and many homeowners have been counting on greater appreciation for this year. The housing sector is uneven, putting home prices at risk where appreciation, given limited wage gains, is a key source of homeowner wealth.

Recent History Of This Indicator:
Home-price appreciation may not be booming but has been respectable, roughly around 6.0 percent year-on-year for most readings including the FHFA house price index where the prior report came in at 5.9 percent. Month-on-month, Econoday forecasters see December's rate rising a solid 0.5 percent. With wage gains limited, home-price appreciation is perhaps the central driver right now for household wealth.