The S&P/Case-Shiller 20-City Composite Index rose
slightly in February on a seasonally-adjusted basis, beating analysts' expectations by a hair while showing
slowing rates of home price gains. The 20-City
Index was up 0.8 percent against consensus
expectations of 0.7 percent. The 10-City
Index rose 0.9 percent. The 20-City rose
13.1 percent compared to February 2013 and the 10-City was up 12.9 percent on
an annual basis. There was no change on an unadjusted basis.
Thirteen cities saw lower annual rates of appreciation than in January and
thirteen saw lower month-over-month increases.
Las Vegas had the largest annual return at 23.1 percent but that was down
from the annual rate of 24.9 percent the previous month. Only five cities saw their annual rates improve in February.
After posting annual gains of over 20 percent for their twelfth consecutive
month, Las Vegas and San Francisco both decelerated in their annual rates. San
Diego narrowed the gap with a return of 19.9 percent, Washington D.C. recorded
its eighth consecutive improvement with an annual rate of 9.1 percent, its
highest since May 2006.
Cleveland had the largest monthly decline
of 1.6 percent and Minneapolis followed at -0.9 percent. Las Vegas posted -0.1
percent, marking its first decline in almost two years. Tampa had its largest
decline, 0.7 percent, since January 2012.
David M. Blitzer, Chairman of the
Index Committee at S&P Dow Jones Indices said of the February results that
while monthly results held steady the annual rates for both indices cooled the
most they have in some time. "The
three California cities and Las Vegas have the strongest increases over the
last 12 months as the West continues to lead. Denver and Dallas remain the only
cities which have reached new post-crisis price peaks. The Northeast with New
York, Washington and Boston are seeing some of the slowest year-over-year
gains. However, even there prices are above their levels of early 2013. On a
month-to-month basis, there is clear weakness. Seasonally adjusted data show
prices rose in 19 cities, but a majority at a slower pace than in January."
Blitzer said that even with recent
price increases most housing statistics are weak with sales of both new and
existing houses either flat or down. "The
recovery in housing starts, now less than one million units at annual rates, is
faltering. Moreover, home prices nationally have not made it back to
2005. Mortgage interest rates, which jumped in May last year and are
steady since then, are blamed by some analysts for the weakness. Others cite
difficulties in qualifying for loans and concerns about consumer confidence.
The result is less demand and fewer homes being built," he said.
"Five years into the recovery
from the recession, the economy will need to look to gains in consumer spending
and business investment more than housing," Blitzer continued. "Long overdue activity in residential
construction would be welcome, but is certainly not assured."
As of February 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 20 percent. The recovery from the March 2012 lows
is 23 percent for the 10-City and 20-City Composites.