S&P: Home Price Gains Slow Slightly, but Stay Hot
Home price appreciation slowed a tad in April, but continued to maintain a 5 percent annual growth rate for the sixth straight month, Standard & Poor’s, New York, reported yesterday.
The S&P/Case-Shiller National Home Price Index reported a 5.0 percent annual gain in April, down from 5.1 percent in March. The 10-City Composited posted a 4.7 percent annual increase, down from 5.1 percent; while the 20-City Composite reported a 5.4 percent annual gain, down from 5.5 percent in March.
Month over month, the National and 10-City Composite saw a 1.0 percent gain in April, before seasonal adjustment, while the 20-City Composite posted a 1.1 percent increase. After seasonal adjustment, the National Index recorded a 0.1 percent month-over-month increase, the 10-City Composite posted a 0.3 percent increase and the 20-City Composite reported a 0.5 percent increase.
“The housing sector continues to turn in a strong price performance,” said David Blitzer, Managing Director and Chairman of the Index Committee with S&P Dow Jones Indices. “The home price increases reflect the low unemployment rate, low mortgage interest rates and consumers’ generally positive outlook. One result is that an increasing number of cities have surpassed the high prices seen before the Great Recession.”
Mark Vitner, senior economist with Wells Fargo Securities, Charlotte, N.C., noted gains were slightly smaller than expected, as affordability hurdles and slower global growth appear to cool off price increases.
“Home price appreciation appears to be settling in near 5 percent, as earlier gains in high-priced global gateways, like New York City, Washington, D.C., Miami and San Francisco, have run up against affordability challenges and fewer overseas buyers,” Vitner said. “Tech-centric cities such as Portland, Seattle and Denver are now seeing the fastest price gains. Tampa and Atlanta are also roaring back, reflecting stronger job growth and population gains.”
The report said 15 cities saw prices rise, two cities were unchanged and three cities experienced negative monthly prices changes after seasonal adjustment. Portland (12.3 percent), Seattle (10.7 percent) and Denver (9.5 percent) reported highest year-over-year gains among the 20 cities with another month of annual price increases. Nine cities reported greater price increases in the year ending April versus the year ending March
The report said as of April, average home prices for the 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 10.7-12.7 percent. Since March 2012 lows, the 10-City and 20-City Composites have recovered 37.1 percent and 39.2 percent, respectively.
