Home price growth accelerated in November, according to a report released Tuesday, underscoring that the market continues to favor sellers and present affordability challenges for buyers. The S&P/Case-Shiller Home Price Index, covering the entire nation, rose 5.3% in the 12 months ended in November, greater than a 5.1% increase in October. The 10-city index gained 5.3% from a year earlier, compared with a 5% increase in October. The 20-city index gained 5.8% year-over-year from 5.5% a month earlier.
Economists surveyed by The Wall Street Journal expected a 5.6% increase in the 20-city index. “Home prices extended their gains, supported by continued low mortgage rates, tight supplies and an improving labor market,” said David Blitzer, managing director at S&P Dow Jones Indices. After years of volatility, home price growth appears to have stabilized at an annual rate of close to 5%. But while price growth has remained fairly steady throughout the year, the pace of sales has fluctuated, in part because high prices have started to scare some buyers out of the market. The hottest markets in the country, primarily on the West Coast, continued to show double-digit price gains. Portland had an 11.1% price gain, followed by San Francisco with 11% and Denver with 10.9%. Three cities—Dallas, Denver and Portland—have reached new all-time highs, while San Francisco pulled even with its previous peak. Month-over-month price gains were also fairly strong. Not seasonally adjusted, the U.S. Index rose 0.1% from October to November. The 10-city index was unchanged and the 20-city index gained 0.1% month-over-month in November. After seasonal adjustment, the national, 10-city and 20-city indexes all gained 0.9% from October to November. Case-Shiller offers one of the clearest indicators of how home prices are faring, but also provides a delayed picture. Other recent indicators show that the pace of home sales slowed considerably in October and November before picking up again in December. Existing home sales rose nearly 15% in December from the prior month to a seasonally adjusted annual pace of nearly 5.5 million, the National Association of Realtors said Friday. For all of 2015, sales reached 5.26 million, the highest annual level since 2006. Strong gains in sales prices and volumes are likely to limit growth in 2016, as buyers are reaching the limit of what they can afford and are willing to pay. Lawrence Yun, chief economist for the National Association of Realtors, who released his updated forecast for 2016 last week, said he expects the volume of home sales to grow by just 1% to 3% due to rising mortgage rates and a lack of new supply. Write to Laura Kusisto at laura.kusisto@wsj.com This article originally appeared on The Wall Street Journal.