The S&P Dow Jones Case-Shiller Home Price Indices for June confirm
what reports from earlier months have indicated, that there is a sustained
slowdown in home price increases. June
data indicate that the slowdown is also nationwide, affecting every one of the
20 cities tracked.
The National Index, which has been reported quarterly but will now be
published monthly, gained 6.2 percent in the 12 months that ended in June. Both the 10-City and the 20-City Composite
Indices were up 8.1 percent on a year over year basis, but all three measures
were considerably lower than in May and every city saw its rate of price
increase worsen on an annual basis.
The National Index was up 0.9 percent in June; it had increased by 1.1
percent from April to May. The twenty city
composites each increased by 1.0 percent compared to 1.1 percent for the
10-City and 1.2 percent for the 20-City the previous month.
"Home price gains continue
to ease as they have since last fall," David
Chairman of the Index Committee at S&P Dow Jones Indices said. "For the first time since
February 2008, all cities showed
lower annual rates than
the previous month.
Other housing indicators - starts,
existing home sales
and builders' sentiment
- are positive. Taken together,
these point to a more normal housing sector."
cities saw their year-over-year rates weaken
in June. For the second consecutive month,
Francisco saw its
rate decelerate by almost three percentage points -
from 18.4 percent in April to 12.9
percent in June.
Phoenix showed its smallest
since March 2012, 6.9
showed a marginal increase of 0.8 percent over the last 12 months while Las
Vegas led with a gain
Monthly price gains remain strong with
all 20 cities reporting a third consecutive month of price increases and for 19 of them (New York being the exception
due to a slight dip in March) the fourth in a row. Five cities -
Detroit, Las Vegas, New York, Phoenix and San Diego - posted larger gains in June than in May. Dallas and Denver continue to set new price peaks while Detroit
remains the only city below its
January 2000 value.
New York had the strongest monthly increase at 1.6 percent, the largest
since June 2013. Chicago, Detroit, and
Las Vegas all posted increases of 1.4 percent; for Las Vegas this was the
largest monthly gain since last summer. It was the eighth consecutive increase for San Francisco but at 0.3 percent the smallest since
"The monthly National Index rose 0.9 percent in June," Blitzer said. "While
all 20 cities saw
higher home prices over the last 12 months,
experienced slower gains.
Francisco, the pace of price increases
halved since late last summer. The Sun
Belt cities - Las Vegas,
Phoenix, Miami and Tampa
- all remain a third
more below their peak prices
almost a decade ago."
Prices as of June
on the National Index are back to the levels they experienced in the spring of
2005. The 10- and 20-City Indices show
average home prices back to the fall 2004 levels. Measured from their June/July 2006 peaks, the peak-to-current decline for both Composites is approximately 17 percent. The recovery from the March 2012 lows is 27.8 and 28.5 percent for the 10-City and 20-City
Blitzer said, "Bargain basement mortgage
rates won't continue forever; recent improvements in the labor markets and comments
from Fed chair Janet Yellen and others hint that interest rates could rise as soon as the first
quarter of 2015. Rising mortgage rates won't send housing
into a tailspin, but will further
dampen price gains."
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 S&P/Case-Shiller National U.S. Home Price Index tracks the value of single-family housing within the United States. The index is a composite of single-family home price indices
for the nine U.S. Census divisions. The S&P/Case-Shiller 10- and 20-City Composites are value- weighted
averages of relevant metro area indices.
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.