Depending on which report you read this morning - that from Case-Shiller or from the Federal Housing Finance Agency (FHFA), home prices in
April were either flattening or out and out flat. S&P's Case-Shiller Home Price Indices
(HPI) were up by about 1 percent nationally but many cities reported lower
returns monthly than in March and nearly all had annual increases lower than in
the previous report. The FHFI HPI showed
no increase whatsoever from March when the HPI increased by 0.7 percent.
Case-Shiller's 10-City and 20-City Composites rose 1.0 and 1.1
respectively from March to April and posted annual gains of 10.8 percent. Annual gains for the two indices in March were
in excess of 12 percent. Nineteen of the
20 cities also posted lower annual gains in April than in the previous month
and three former high-flying cities, Los Angeles, San Diego, and San Francisco,
saw annual returns worsen by approximately three percentage points. San Francisco's 18.2 percent annual gain
marked the first time in 14 months this statistic fell below 20 percent. The city however did pull out a monthly gain of
All 20 cities had higher HPI's in April than in March but seven,
Cleveland, Los Angeles, Miami, Phoenix San Diego, and San Francisco had smaller
gains than in the previous month. Boston's
HPI was up 2.9 percent from March, the largest monthly gain in 27 years. It was also the only city to improve on its
March annual number, a 12 month gain that went from 8.3 percent to 9.0
"Although home prices rose in April, the annual gains weakened," says David M. Blitzer,
Chairman of the Index Committee
at S&P Dow Jones Indices.
"Overall, prices are rising month-to-month but at a slower rate. Last year some Sunbelt cities were seeing year-over-year numbers close to 30
percent, now all are below 20
percent: Las Vegas (18.8 percent), Los Angeles (14.0
(9.8 percent), San Diego (15.3
percent) and San Francisco (18.2
percent). Other cities around the nation are also experiencing slower price
"While the annual numbers worsened, the monthly figures were seasonally strong. Five cities - Atlanta,
Boston, Chicago, San Francisco and Seattle
- reported monthly
gains of 2 percent or more. Dallas
and Denver gained 1.6 percent and continue to set new peaks. Boston and Charlotte
are less than 10
percent away from their peaks.
"Near term economic factors favor further gains in housing: mortgage rates are lower than a year ago, the Fed is expected
to keep interest
rates steady until mid-2015 and the labor market is improving. However,
housing is not back to normal: prices
are being supported by cash sales,
low inventories and declining
foreclosure and REO sales. First time
home buyers are not back in force and qualifying for a mortgage remains challenging. The question
is whether housing
will bounce back before the Fed begins to
tighten sometime next year."
Average home prices in April were back to their summer 2004 levels. Measured from their June/July
2006 peaks, the peak-to-current decline for both Composites is approximately 18-19
percent. The recovery
from the March
2012 lows is 25-26 percent for the 10-City and 20-City Composites.
In addition to Boston and San Francisco, ten cities saw
higher monthly returns than in March with Seattle matching San Francisco's 2.3
percent jump. At the bottom of the list New York gained only
0.1 percent but that was an improvement on March's -0.4 percent. Detroit remains the only city below its January 2000 value.
FHFA said its April HPI which was unchanged from March
represented an annual increase of 5.9 percent.
The annual increase as of April 2013 was 7.2 percent. The U.S. index is 6.9 percent below its peak
in April 2007 and at about the same level as in July 2005.
The monthly changes ranged from a low of -1.3 percent in
New England to +0.6 percent in the East South Central division. Annual changes were all positive, ranging
from a low of 1.7 percent in the Middle Atlantic division to 10.7 percent in
the Pacific division.
The S&P/Case-Shiller Home Price
Indices are constructed to track the price path of typical single-family homes located in each metropolitan area provided. Each index combines
matched price pairs for thousands
of individual houses from the available universe of arms-length sales data. The indices
have a base value of 100 in January
2000; thus, for example, a current index value of 150 translates to a 50
percent appreciation rate since January 2000 for a typical
home located within the subject market.
The FHFA HPI is a weighted,
repeat-sales index obtained by reviewing repeat mortgage transactions on single-family
properties whose mortgages have been purchased or securitized by Fannie Mae or
Freddie Mac since January 1975.