The growth in home prices nationally accelerated in the second quarter. The S&P/Case-Shiller Home Price Index, which covers all nine U.S. census divisions rose 7.1 percent during the quarter compared to an increase of 10.1 percent over the last four quarters. Both the 10-City Composite Index and the 12-City were up 2.2 percent in June compared to May and the 10-City posted a return of 11.9 percent for the 12 month period ending in June; the 20-City rose 12.1 percent.
Home price appreciation, however, may be slowing in some quarters. While all 20 cities posted gains on a monthly and annual basis the month-over-month June price hike was larger in only six cities compared to ten in May.
"National home prices rose more than 10% annually in each of the last two quarters," David M. Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices said. "However, the monthly city by city data show the pace of price increases is moderating.
"The Southwest and California have consistently led the recovery," Blizer said, "with Las Vegas, Los Angeles, Phoenix and San Francisco posting at least 15 months of gains. Looking at the cities, New York recorded its highest monthly return since 2002. Atlanta was up the most at +3.4% and Washington DC had the lowest return at +1.0%. In terms of annual rates of change, San Francisco lost its leadership position with Las Vegas showing the highest post-recession gain of 24.9%.
"Thirteen out of twenty cities saw their returns weaken from May to June. As we are in the middle of a seasonal buying period, we should expect to see the most gains. With interest rates rising to almost 4.6%, home buyers may be discouraged and sharp increases may be dampened," Blizer said.
Other housing news, while positive, is less so than a year ago, he pointed out. Housing starts and new home sales are running behind the stronger pace of existing home sales but despite the recent increases in interest rates homes remain affordable and credit requirements have eased somewhat.
The National Home Price Index, which is released quarterly, shows that home prices across the country are, on average, back to early 2004 levels. The 10-City and 20-City Composite indices are also back to spring 2004 price levels and the peak to current decline is approximately 23 percent. The two indices peaked in June and July of 2006 and since hitting their troughs in March 2012 have recovered 18.4 percent and 29.0 percent respectively.
While all 20 cities covered by the indices have shown price increases for at least three consecutive months the only ones to see their prices climb more quickly in June than in May were Charlotte, Cleveland, Las Vegas, Minneapolis, New York, and Tampa. Atlanta had the largest monthly price increase, 3.4 percent, the same increase as in May. San Francisco dropped to +2.7% in June from +4.3% in May. Dallas and Denver reached new all-time highs for the second time in as many months with returns of +1.7% each in June. San Francisco's rebound is the largest, up 47.0% from its low in March 2009. Phoenix is second, 37.1% above its September 2011 low.
Year-over-year, Las Vegas and San Francisco were the only two cities to post gains of over 20%. Gains in Atlanta, Detroit and Phoenix slipped to +19.0%, +16.4% and +19.8%, respectively. Seven cities - Dallas, Las Vegas, Los Angeles, Miami, New York, San Diego and Tampa - showed improvement in their annual rates. Out of the 13 remaining metropolitan areas, Detroit showed the most deceleration but it still posted an impressive 16.4% increase. Despite gaining 35.6% from its post-recession low in April 2011, Detroit remains the only city below its January 2000 level.