Feb 25 2014, 9:02am CST | by Forbes
Home prices across the country fell for the second month in a row, according to S&P/Case-Shiller data released today. The 20-City Composite, which tracks single-family home prices in major metro areas, dipped by 1/10th of 1%. It fell by that same amount in November.
The S&P/Case-Shiller Home Price Indices track the price of single-family homes across the U.S., with the 10- and 20-City Composite indices focused on major metro areas (Atlanta, Boston, Charlotte, Chicago, Cleveland, Dallas, Denver, Detroit, Las Vegas, Los Angeles, Miami, Minneapolis, New York, Phoenix, Portland, San Diego, San Francisco, Seattle, Tampa, Washington). The data is reported with a two month lag (it’s February; we’re reporting on December figures).
“The S&P/Case-Shiller Home Price Index ended its best year since 2005,” said David M. Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices, via a release. “However, gains are slowing from month-to-month and the strongest part of the recovery in home values may be over. Year-over-year values for the two monthly Composites weakened and the quarterly National Index barely improved.”
Although the dip in December’s 20-City Composite was tiny, it correlates well with other measures of the housing market, which are showing signs of slowing. Last week the National Association of Realtors’ more timely Existing Home Sales report–which tracks sales of previously-owned homes–showed a 5.1% dip in sales activity in January from December. Housing starts were down 16% in January compared to December. Builder confidence is also down this month, according to the National Association of Homebuilders/Wells Fargo Housing Market Index, which tracks builder perceptions of current single-family home sales and the level of potential buyer traffic, as well as expectations for sales for the next six months.
Year-over-year, the rate of home price growth is also slowing. The 10-city Composite remained relatively flat in December compared to November. Although the 10-City and 20-City Composites posted gains of 13.6% (not seasonally adjusted) and 13.4% (not seasonally adjusted), that rate is about 30 basis points lower than their year-over-year gains in November. Home prices have now registered gains for 19 consecutive months. Average home prices nationally are back at mid-2004 levels, though still about 20% off their mid-2006 peak.
The top three performing cities of 2013 in terms of price gains, year-over-year, were Las Vegas (25.5%), Los Angeles (20.3%) and San Francisco (22.6%). But the Sun Belt, with the exception of Dallas, Miami and Tampa, saw lower year-over-year rates in December than November.
Of particular note was Chicago, which showed its highest year-over-year return (11.3%) since December 1988, and Dallas (10.2%), which posted its largest annual gain since the indices began tracking that city in 2000.
The six cities with the highest year-over-year figures saw their rates of price increases decline (Las Vegas, San Francisco, Los Angeles, Atlanta, San Diego and Detroit) and most cities ranked at the bottom improved (Denver, Washington and New York) – Charlotte and Cleveland were the two exceptions. Phoenix, which has led the recovery with 26 consecutive months of price gains, saw prices dip 0.3% for December, its biggest drop since March 2011.
“Recent economic reports suggest a bleaker picture for housing,” Blitzer said. “Some of the weakness reflects the cold
weather in much of the country. However, higher home prices and mortgage rates are taking a toll on affordability. Mortgage default rates, as shown by the S&P/Experian Consumer Credit Default Index, are back to their pre-crisis levels but bank lending standards remain strict.”/>
Source: Forbes Business
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