Data through March 2014, released by S&P Dow Jones Indices for its S&P/Case-Shiller Home Price Indices, a measure of U.S. home prices, show the 10-City and 20-City Composite Indices gained 0.8 percent and 0.9 percent month-over-month. In the first quarter of 2014, the National Index gained 0.2 percent. Nineteen of the 20 cities showed positive returns in March – New York was the only city to decline.
In March, the National and Composite Indices saw their annual rates of gain slow significantly. Chicago showed its highest year-over-year return of 11.5 percent since December 1988. Las Vegas and San Francisco, the cities with the highest returns, saw their rates of gain slow to approximately 21 percent; their post-crisis peak returns were 29.2 percent and 25.7 percent. At the lower end was Cleveland with a gain of 3.9 percent in the 12 months ending March 2014.
“The year-over-year changes suggest that prices are rising more slowly,” said David Blitzer, chairman of the Index Committee at S&P Dow Jones Indices. “Annual price increases for the two composites have slowed in the last four months and 13 cities saw annual price changes moderate in March. The National Index also showed decelerating gains in the last quarter. Among those markets seeing substantial slowdowns in price gains were some of the leading boom-bust markets including Las Vegas, Los Angeles, Phoenix, San Francisco and Tampa.
“Despite signs of decelerating prices, all cities were higher than a year ago and all but New York were higher in March than in February,” Blitzer continued. “However, only Denver and Dallas have set new post-crisis highs and they experienced relatively lower peak levels than other cities. Four locations are fairly close to their previous highs: Boston (8 percent), Charlotte (9 percent), Portland (13 percent) and San Francisco (15 percent).
“Housing indicators remain mixed. April housing starts recovered from the drop in March but virtually all the gain was in apartment construction, not single family homes. New home sales also rebounded from recent weakness but remain soft. Mortgage rates are near a seven month low but recent comments from the Fed point to bank lending standards as a problem. Other comments include arguments that student loan debt is preventing many potential first time buyers from entering the housing market.”
New York was the only city to decline in the month of March. San Francisco posted the biggest gain of 2.4 percent with Seattle following at +1.9 percent. All 20 cities improved in March as compared to their February returns. Cleveland improved the most; it went from a decline of 1.6 percent in February to a gain of 1.5 percent in March. Cleveland and San Francisco posted their biggest returns since last June. All 20 cities continued to record positive year-over-year returns.