Home prices ticked up in November, supporting growth, but the pace could slow as the crash in crude-oil prices hits certain U.S. housing markets, according to a report released Tuesday.
U.S. home prices inched up 0.1% in November, pulling up annual growth to 5.5% from a year-over-year pace of 5.4% in October, according to CoreLogic, an Irvine, Calif.–based analysis firm. But by November 2015 the annual pace could cool to 4.6% — the slowest growth since mid-2012 — as dropping energy prices strike states such as Texas and North Dakota.
“Three of the top four states with the highest price appreciation are energy intensive and had been benefitting from the energy boom which is currently receding as oil prices trend downward. These states…may see some downward pressure on prices in 2015,” said Sam Khater, deputy chief economist at CoreLogic.
Oil’s fall is just one factor behind slowing home prices. Annual home-price growth has been trending down since late 2013 as more owners have listed their homes for sale. Annual price growth hasn’t been in the double digits since March, though appreciation somewhat firmed in recent months. In November 2013, year-over-year home-price growth reached 11.6%.
Some markets are running much hotter than others. There are 29 states that are at or within 10% of their local peak price. And in November seven states, including the likes of Colorado, North Dakota and Texas, reached record price levels.
Meanwhile, U.S. markets that were hit particularly hard when the housing bubble burst are still struggling. In Nevada, for example, home prices in November were 36% below the local peak. Meanwhile, prices were down 33% in Florida and 29% in Arizona. Through November U.S. prices were down 12.9% from a 2006 bubble peak.
Cooler appreciation may lure buyers who feel that they’ll have a better shot at getting a fair deal, and make home buying a more realistic choice for families that haven’t seen quickly rising wages in recent years. But slower price growth also means that it could take longer for equity to rise for struggling owners.