WASHINGTON, Feb 24 (Reuters) – U.S. single-family house price gains slowed in December, but economists believe tight inventory could prevent an outright decline in national home prices.
House prices edged up 0.1% after an upwardly revised 0.7% increase in November, the Federal Housing Finance Agency said on Tuesday. House prices were previously reported to have advanced 0.6% in November. Prices increased 1.8% in the 12 months through December, after climbing 2.1% in November. They rose 0.8% in the fourth quarter.
Supply remains tight, especially for entry-level homes, propping up prices and keeping the dream of owning a house out of reach for many Americans. The Trump administration has implemented a slew of measures to improve housing affordability.
But President Donald Trump’s aggressive trade and immigration policies, which have raised prices for building materials and appliances and undercut labor supply, were constraining builders’ ability to ramp up housing construction, economists and trade groups say.
The U.S. Supreme Court last Friday struck down Trump’s import tariffs, which he pursued under a law meant for use in national emergencies. Trump swiftly imposed a 10% global tariff for 150 days to replace some of the emergency duties, before raising the rate to 15% on Saturday.
Building lots are also scarce amid state and local government regulations. Though mortgage rates dropped in recent weeks, economists saw limited scope for further declines, citing worries over federal government debt that are keeping U.S. Treasury yields elevated.
Mortgage rates track the 10-year Treasury yield. Labor market conditions also remain too sluggish to stimulate demand.
Residential investment, which includes home building and sales, has contracted for four straight quarters.
Monthly house price inflation in December was curbed by a 1.0% decline in the West Central region and a 0.1% dip in the East South Central region. House prices were unchanged in the Pacific region, but surged in the Middle Atlantic region.
There were solid increases in the Mountain and East North Central regions. On a year-on-year basis, prices fell in the Pacific, Mountain and South Atlantic regions. They increased 5.2% in the East North Central region and advanced 4.8% in the Middle Atlantic region.
(Reporting by Lucia Mutikani; Editing by Andrea Ricci)
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