Case-Shiller Indices Confirm Easing Monthly Home Price Appreciation
Home prices rose by just 0.1 percent in November, reported the Standard & Poor’s/Case-Shiller Home Price Indices.
The slight monthly gain matched a report earlier this week from Black Knight Financial Services, Jacksonville Fla. The S&P 10-City Composite was unchanged and the 20-City Composite reported gains of 0.1 percent month over month. After seasonal adjustment, the National Index, along with the 10-City and 20-City Composites, all increased by 0.9 percent month over month. Fourteen of 20 cities reported increases in November before seasonal adjustment; after seasonal adjustment, all 20 cities increased for the month.
S&P said, however, that year over year gains continued to move higher, up by 5.3 percent in November from 5.1 percent in October. The 10-City Composite increased by 5.3 percent; the 20-City Composite grew by 5.8 percent in November, compared to 5.5 percent reported in October.
“Historically low levels of inventory for new and existing homes should continue to support home prices into 2016,” said Mark Vitner, senior economist with Wells Fargo Securities, Charlotte, N.C. “Meanwhile, housing demand is likely to remain solid as underlying fundamentals, including improving labor market conditions and household formations, continue to strengthen.”
Portland, San Francisco and Denver continue to report the highest year over year gains among the 20 cities with double digit annual price increases. Portland led the way with an 11.1 percent year-over-year price increase, followed by San Francisco with 11.0 percent and Denver with 10.9 percent. Fourteen cities reported greater price increases in the year ending November versus the year ending October. Phoenix had the longest streak of year-over-year increases, reporting a gain of 5.9 percent in November, the 12th consecutive increase in annual price gains. Detroit posted a 6.3 percent year-over-year increase, up from 5.1 percent, the largest annual increase.
“Home prices extended their gains, supported by continued low mortgage rates, tight supplies and an improving labor market,” said David Blitzer, Managing Director and Chairman of the Index Committee with S&P Dow Jones Indices. “Numbers suggest a seller’s market. The consumer portion of the economy is doing well; like housing, automobile sales were quite strong last year.”
S&P reported as of November, average home prices for metro areas within the 10-City and 20-City Composites returned 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 34.9 percent and 36.4 percent, respectively.
