S&P: Home Price Increases Slow Down in February
S&P Dow Jones Indices, New York, said its Case-Shiller Home Price Indices showed little change in February.
The National Home Price Index, covering all nine U.S. census divisions, recorded a 5.3 percent annual gain in February, unchanged from January. The 10-City Composite increased by 4.6 percent, compared to 5.0 percent a year ago. The 20-City Composite fell to 5.4 percent, down from 5.7 percent in January.
Portland, Seattle and Denver reported highest year-over-year gains among the 20 cities; Portland led the way with an 11.9 percent year-over-year price increase, followed by Seattle with 11.0 percent and Denver with 9.7 percent. Seven cities reported greater price increases for the year ending February 2016.
Month over month, before seasonal adjustment, the National Index posted a gain of 0.2 percent month-over-month in February. The 10-City Composite recorded an 0.1 percent month-over-month increase while the 20-City Composite posted an 0.2 percent increase. After seasonal adjustment, the National Index recorded an 0.4 percent increase. The 10-City Composite posted an 0.6 percent increase, while the 20-City Composite reported a 0.7 percent increase. Fourteen of 20 cities reported increases in February before seasonal adjustment; after seasonal adjustment, only 10 cities increased for the month.
“While home prices continue to rise, there has been some moderation on a year-over-year basis,” said Mark Vitner, senior economist with Wells Fargo Securities, Charlotte, N.C. “Prices also moderated in many gateway cities. Affordability remains a concern for many parts of the country, as home prices continue to rise faster than incomes. Western markets have seen particularly strong price gains.”
“Home prices continue to rise twice as fast as inflation, but the pace is easing off in the most recent numbers,” said David Blitzer, managing director and chairman of the Index Committee with S&P Dow Jones Indices. “While financing is not an issue for home buyers, rising prices are a concern in many parts of the country.”
Blitzer said homeowners looking to sell their house and trade up to a larger house or a more desirable location are concerned with finding that new house. “Additionally, the pace of new single-family home construction and sales has not completely recovered from the recession,” he said.
The report said as of February, average home prices for metro areas within the 10-City and 20-City Composites are back to their winter 2007 levels. Measured from their June/July 2006 peaks, the peak-to-current decline for both Composites is 11-13 percent. Since March 2012 lows, the 10-City and 20-City Composites have recovered by 34.5 percent and 36.3 percent, respectively.
