Forward from S&P
Home Prices Rise in March
According to the S&P/Case-Shiller Home Price Indices
New York, May 27, 2014 – Data through March 2014, released
today by S&P Dow Jones Indices for its S&P/Case-Shiller1 Home Price
Indices, the leading measure of U.S. home prices, show the 10-City and 20-City
Composite Indices gained 0.8% and 0.9% month-over-month. In the first quarter
of 2014, the National Index gained 0.2%. Nineteen of the 20 cities showed
positive returns in March – New York was the only city to decline. Dallas and
Denver reached new index peaks.
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% since December 1988. Las Vegas and San
Francisco, the cities with the highest returns, saw their rates of gain slow to
approximately 21%; their post-crisis peak returns were 29.2% and 25.7%. At the
lower end was Cleveland with a gain of 3.9% in the 12 months ending March 2014.
The chart above depicts the annual returns of the U.S.
National, the 10-City Composite and the 20-City Composite Home Price Indices.
The S&P/Case-Shiller U.S. National Home Price Index, which covers all nine
U.S. census divisions, recorded a 10.3% gain in the first quarter of 2014 over
the first quarter of 2013. The 10- and 20-City Composites posted year-over-year
increases of 12.6% and 12.4% in March 2014.
“The year-over-year changes suggest that prices are rising
more slowly,” says David M. 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. 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%), Charlotte (9%), Portland
(13%) and San Francisco (15%).
“Housing indicators remain mixed. April housing starts
recovered 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.”
The chart above shows the index levels for the U.S. National
Home Price Index, as well as its annual returns. As of the first quarter of
2014, average home prices across the United States are back to their levels
posted in the spring of 2004. At the end of the first quarter of 2014, the
National Index was up 0.2% over the fourth quarter of 2013 and 10.3% above the
first quarter of 2013.
The chart above shows the index levels for the 10-City and
20-City Composite Indices. As of March 2014, average home prices across the
United States are back to their mid-2004 levels. Measured from their June/July
2006 peaks, the peak-to-current decline for both Composites is approximately
19-20%. The recovery from the March 2012 lows is 24% for the 10-City and
20-City Composites.
New York was the only city to decline in the month of March.
San Francisco posted the biggest gain of 2.4% with Seattle following at +1.9%.
All 20 cities improved in March as compared to their February returns.
Cleveland improved the most; it went from a decline of 1.6% in February to a
gain of 1.5% in March. Cleveland and San Francisco posted their biggest returns
since last June.
All 20 cities continued to record positive year-over-year
returns. Thirteen of the 20 MSAs showed lower annual increases in March. Tampa
showed the most deceleration – the city posted +13.4% year-over-year in
February and +10.7% in March. Las Vegas and San Francisco, the only two cities
to post annual gains of over 20%, also saw their rates decelerate; they gained
21.2% and 20.9%, respectively. The only six cities to show higher
year-over-year returns in March were Chicago, Cleveland, Detroit, Miami,
Minneapolis and New York.
Effective with this month’s release, two series of technical
adjustments to the S&P/Case-Shiller Home Price Indices were implemented.
Weights used to calculate the 10-City and 20-City Composite Indices were
updated to reflect the latest available data from the American Community Survey
sample published by the U.S. Census Bureau. Also, the data sources underlying
the indices have been aligned with data sources used by CoreLogic, Inc., the
index calculator. To prevent any break in the index series, divisors will be
used in the index calculation.
More than 27 years of history for these data series are
available, and can be accessed in full by going to www.homeprice.spdji.com.
Additional content on the housing market may also found on S&P Dow Jones Indices' housing blog: www.housingviews.com.
The table below summarizes the results for March 2014. The
S&P/Case-Shiller Home Price Indices are revised for the 24 prior months,
based on the receipt of additional source data.