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In what appears to be an unstoppable upward trajectory, home prices are up again in the latest S&P/Case-Shiller Home Price Indices report—albeit with a little less energy, and with a cautionary warning of near-term challenges.
During April, the S&P/Case-Shiller U.S. National Home Price Index reported a five percent annual gain in April, down from 5.1 percent the previous month. The 10-City Composite posted a 4.7 percent annual increase, down from 4.8 percent in March, while the 20-City Composite reported a 5.4 percent year-over-year gain, down from 5.5 percent from the prior month.
Before the seasonal adjustment, the National Index and the 10-City Composite each posted a one percent month-over-month gain while the 20-City Composite posted a 1.1 percent increase in April. After the seasonal adjustment, the however, the National Index recorded a 0.1 percent month-over-month increase while the 10-City Composite posted a 0.3 percent increase, and the 20-City Composite saw a 0.5 percent month-over-month increase.
The metro areas with the greatest year-over-year gains were Portland (12.3 percent), Seattle (10.7 percent) and Denver (9.5 percent). Nine cities reported greater price increases in the year ending in April versus the year ending in March.
But David M. Blitzer, managing director and chairman of the Index Committee at S&P Dow Jones Indices, warned that the greatest threat to U.S. housing may come from across the Atlantic and from the domestic political scene.
“The outlook is not without a lot of uncertainty and some risk,” Blitzer said. “Last week’s vote by Great Britain to leave the European Union is the most recent political concern while the U.S. elections in the fall raise uncertainty and will distract home buyers and investors in the coming months. The details in the S&P/Case-Shiller Home Price data also hint at possible softness. Seasonally adjusted figures in the report show that three cities saw lower prices in April compared to only one city in March. Among the 20 cities, 16 saw either declines or smaller increases in monthly prices in the seasonally adjusted numbers.”