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Rise in Home Prices Slows in May

NationalMortgageProfessional.com
Jul 29, 2014

Data through May 2014, released by S&P Dow Jones Indices for its S&P/Case-Shiller Home Price Indices, the leading measure of U.S. home prices, show the Composite Indices increased at a slower pace. The 10-City Composite gained 9.4 percent year-over-year and the 20-City 9.3 percent, down significantly from the +10.9 percent and +10.8 percent returns reported last month. All cities with the exception of Charlotte and Tampa saw their annual rates decelerate. In the month of May, the 10- and 20-City Composites posted gains of 1.1 percent. For the second consecutive month, all 20 cities posted increases. Charlotte posted its highest monthly increase of 1.4 percent in over a year. Tampa gained 1.8 percent, followed by San Francisco at +1.6 percent and Chicago at +1.5 percent. Phoenix and San Diego were the only cities to gain less than one percent with increases of 0.4 percent and 0.5 percent, respectively. “Home prices rose at their slowest pace since February of last year,” said David M. Blitzer, chairman of the Index Committee at S&P Dow Jones Indices. “The 10- and 20-City Composites posted just over nine percent, well below expectations. Month-to-month, all cities are posting gains before seasonal adjustment; after seasonal adjustment 14 of 20 were lower." “Year-over-year, nine cities – Las Vegas (16.9 percent), San Francisco (15.4 percent), Miami (13.2 percent), San Diego (12.4 percent), Los Angeles (12.3 percent), Detroit (11.9 percent), Atlanta (11.2 percent), Tampa (10.2 percent) and Portland (10.0 percent) – posted double-digit increases in May 2014," said Blitzer. "The Sun Belt continues to lead with seven of the top eight performing cities. Eighteen of 20 cities had lower year-over-year numbers than last month; San Francisco and San Diego saw their year-over-year figures decelerate by about three percentage points. Housing has been turning in mixed economic numbers in the last few months. Prices and sales of existing homes have shown improvement while construction and sales of new homes continue to lag. At the same time, the broader economy and especially employment are showing larger improvements and substantial gains.” While all cities continue to post year-over-year increases, gains weakened in May. Charlotte was the only MSA to see its annual rate improve; it posted 4.7 percent year-over-year in May versus 4.5 percent in April. Tampa held steady with a gain of 10.2 percent. Despite seeing their rates decrease by two to three percentage points, Las Vegas remained the top performing city with a return of +16.9 percent, followed by San Francisco at +15.4 percent. All cities reported increases month-over-month with nine cities—Charlotte, Cleveland, Detroit, Las Vegas, Los Angeles, Miami, Minneapolis, New York and Tampa—showing larger increases in May than in April. Charlotte posted its largest monthly gain since April 2013, while Minneapolis, New York and Tampa showed their highest since August 2013. New York showed the most improvement with a gain of 1.0 percent in May versus 0.1 percent in April. Boston posted +1.1 percent in May, down from +2.9 percent in April. Dallas and Denver continue to set new peaks while Detroit remains the only city below its January 2000 value. “Home price gains have been tapping the brakes, slowing again in May," said Quicken Loans vice president Bill Banfield. "While homeowners and prospective sellers may find this disappointing, when paired with interest rates that are at 12 month lows, these home prices bring greater affordability to those looking to buy.”
Published
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