Tag Archives: S&P Case-Shiller

S & P Case-Shiller Shows Home Prices Down For Third Consecutive Month

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S & P Case-Shiller Shows Home Prices Down For Third Consecutive MonthHarsh winter weather conditions contributed to home prices falling in January. The S&P Case-Shiller 20-City composite index reported that home prices dropped by 0.10 percent in January, but after seasonal adjustments, home prices increased by 0.80 percent in January as compared to December. 12 of 20 cities posted declines in home prices in January.

There’s no cause for alarm, as year-over-year home prices increased by 13.20 percent as compared to year-over –year readings of 13.40 percent in December and 13.70 percent in November. David Blitzer, chair of the S&P Dow Jones index committee, said “The housing market is showing signs of moving forward with more normal price increases.” Home prices remain about 20 percent below a peak reached in 2006.

Housing Markets Face Challenges

Analysts expect home prices to grow at a slower pace in 2014. Factors impacting home prices include higher mortgage rates that make homes less affordable, new mortgage rules that may affect some homebuyers’ ability to qualify for a mortgage.

A shortage of available homes overshadowed housing market growth in 2013; there just weren’t enough homes available to meet demand in some areas.  The Federal Reserve’s Federal Open Market Committee (FOMC) noted in its statement last week that it was difficult to determine the exact scope of winter weather on recent economic reports.

Regional Markets Show Discrepancies In Recovery

The S & P Case-Shiller 10 and 20-city home price index reports shed light on a “patchwork quilt” housing recovery. While some areas have seen a higher than average rate of year-over-year home price growth, other areas are underperforming.

Here is a sampling of Case-Shiller’s January data throughout the U.S:

Las Vegas, Nevada                             +24.90 percent

San Francisco, California                     +23.10 percent

Chicago, Illinois                                 +10.80 percent

Washington, D.C.                              +9.20 percent

New York, New York                           +6.70 percent

Cleveland, Ohio                                 + 4.00 percent

 The S & P Case Shiller 10 and 20 city home price indices posted year-over-year gains of 13.50 and 13.20 percent respectively.

 FHFA Data Shows Similar Trend

The Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, released its House Price Index (HPI) for January with similar results for homes mortgaged or backed by Fannie Mae and Freddie Mac. The House Price Index indicated that home prices rose by a seasonally-adjusted rate of 0.50 percent from December to January. According to the FHFA HPI, home prices increased by 7.40 percent year-over-year.

January’s HPI was 8.00 percent below the index’s April 2007 high.

The FHFA HPI data is seasonally adjusted and is based on home purchases only.

FHFA month-to-month data for the nine census bureau districts reflects the differences in housing markets throughout the U.S.

FHFA month-to –month home price growth December 2013 to January 2014:

Middle Atlantic division:    + 1.30 percent

New England                        + 1.00 percent

West North Central             + 1.00 percent

Pacific                                    + 0.80 percent

East South Central              + 0.70 percent

Mountain                              + 0.50 percent

South Atlantic                      + 0.30 percent

East North Central              + 0.10 percent

West South Central             –  0.30 percent

Along with warm weather’s arrival is the potential for regional housing markets sidelined over the winter to recover.

Case Shiller Price Index Shows A Spike In Home Prices In The West

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pricehike2According to the S&P Case-Shiller 10-and 20-City Housing Market Indices for September, home prices grew at an average of 13.30 percent year-over-year and achieved the highest growth rate for home prices since February 2006.

On a month-to month basis, home prices are slowing in most areas with 19 cities included in the S&P 20-City Housing Market Index showing lower rates of growth in home prices. September’s average month-to-month growth rate was 1.0 percent for the 20-City HMI as compared to 0.90 percent in August, and 1.90 percent posted earlier in 2013.

Home prices increased by 0.70 percent in September for the combined 20-City and 10-City Housing Market Indices tracked by Case-Shiller.

Rapidly Rising Home Prices In The West: Another Housing Bubble On Tap?

Home prices continued rising in the West, with Las Vegas leading the pack with a 29.10 percent gain year-over-year although average home price in Las Vegas, Nevada remains 46 percent than its peak in February of 2006.

California also showed double-digit year-over-year growth for home prices with San Francisco at 25.70 percent, Los Angeles at 21.80 percent and San Diego posting 20.90 percent growth in home prices year-over-year.

Rapidly increasing home prices in the West are largely due to demand exceeding supply, but buyers may be sitting on the sidelines due to concerns over another housing bubble in the making.

Buyers in this scenario are aware of increasing home prices, but aren’t buying now to avoid higher prices later. Instead they are waiting to see what happens with current home prices and housing market conditions in the longer term.

Chicago, Illinois posted its highest year-over-year growth rate since 2005 while Cleveland, Ohio posted a growth rate of 5.00 percent for September as compared to a month-to-month growth rate of 3.70 percent.

This was the second lowest month-to-month growth rate for home prices, with New York City posting a month-to-month home price growth rate of 4.00 percent from August to September.

FHFA Reports Slight Gain In Home Prices

The Federal Housing Finance Agency reported stronger gains in home prices for properties financed with mortgages owned or guaranteed by Fannie Mae or Freddie Mac. In September, home prices reported by FHFA rose by 0.30 percent as compared to August’s growth rate of 0.40 percent.

On a year-over-year basis, FHFA reported a gain of 8.40 percent between the third quarter of 2012 and the third quarter of 2013. Adjusted for inflation, home prices as reported by FHFA have risen approximately 7.20 percent. FHFA noted that home prices are growing at a rate far above the rate of 1.20 percent reported for other “goods and services.”

Lower numbers of foreclosed homes are seen as a boost for home prices in general; as mortgage lenders tend to offer foreclosed homes for sale at low prices in order to reduce inventories of real estate owned.