Home Price Report Cites Steady Gains

Home prices showed steady gains in March, Standard & Poor’s reported yesterday in its S&P/Case-Shiller Home Price Indices.

The report said home prices showed a 5.2 percent annual gain in March, down from 5.3 percent in February. The 10-City Composite and the 20-City Composites’ year-over-year gains remained unchanged at 4.7 percent and 5.4 percent, respectively, from the prior month.

Before seasonal adjustment, the National Index posted a month-over-month gain of 0.7 percent in March. The 10-City Composite recorded a 0.8 percent month-over-month increase while the 20-City Composite posted a 0.9 percent increase. After seasonal adjustment, the National Index recorded a 0.1 percent month-over-month increase, the 10-City Composite posted a 0.8 percent increase and the 20-City Composite reported a 0.9 percent increase.

Portland, Seattle and Denver reported the highest year-over-year gains among the 20 cities with another month of annual price increases. Portland led with a 12.3 percent price increase, followed by Seattle with 10.8 percent and Denver at 10.0 percent. Ten cities reported greater price increases in the year ending March from February. After seasonal adjustment, six cities saw prices rise, one city was unchanged, and 13 cities experienced negative monthly price changes.

“Home prices are continuing to rise at a 5% annual rate, a pace that has held since the start of 2015,” said David Blitzer, managing director and chairman of the Index Committee with S&P Dow Jones Indices. “The economy is supporting the price increases with improving labor markets, falling unemployment rates and extremely low mortgage rates. Another factor behind rising home prices is the limited supply of homes on the market. The number of homes currently on the market is less than 2 percent of the number of households in the U.S., the lowest percentage seen since the mid-1980s.”

The report said measured from their June/July 2006 peaks, the peak-to-current decline for both Composites is 10.5-12.5 percent. Since the March 2012 lows, the 10-City and 20-City Composites have recovered by 35.7 percent and 37.6 percent, respectively.

Mark Vitner, senior economist with Wells Fargo Securities, Charlotte, N.C., said steady home price appreciation held steady despite showing some signs of moderating, particularly in gateway cities. “Home prices continue to be pulled higher by stronger job and income growth and unusually low inventories of homes for sale,” he said. “Price appreciation has firmed in Dallas, Tampa and Atlanta, which are seeing strong job growth and increased in-migration.”