Home Prices Still Rising, but Decelerating Since April

Both thern10-City and 20-City S&P-Case-Shiller Home Price Indices gained 1.3 percentrnin August to values of 175.8 and 164.53 respectively.  These increases were substantially smallerrnthan those in the June-July period of 1.9 and 1.8 percent and the 2.2 percent pricernappreciation posted by both indices from May to June. </p

All twenty cities posted monthlyrngains in August, although mostrncities showed deceleration compared to July. Las Vegas was at the top of the range withrnappreciation of 2.9 percent, its greatestrnsince August 2004.  Detroitrnand Los Angeles followedrnwith gains of 2.0rnpercent.  Seattle was at the bottom with a positive return of 0.5rnpercent. Month-over-month, San Francisco has been losing momentum as prices increased 4.9rnpercent in April 2013 and 0.9rnpercent in August 2013.</p

The August numbers were 12.8 percent higher than one year earlier forrnboth the 10- and 20-City composites, slightly larger than the respective Julyrnincreases of 12.3 and 12.4 percent.   Thernrate of annual increases was also higher than in July in 14 of the 20rnmetropolitan areas with the largest in Las Vegas (29.2rnpercent), San Francisco (25.4 percent), Los Angeles (21.7 percent) and SanrnDiego (21.5 percent.)  The smallestrnyear-over-year increase was in Cleveland at 3.7 percent.</p

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“The 10-City and 20-City Composites postedrna 12.8% annual growth rate,” says David M. Blitzer,rnChairman of the IndexrnCommittee at S&P Dow Jones Indices. “Both Composites showedrntheir highest annual increases since Februaryrn2006. All 20 cities reportedrnpositive year-over-year returns. Thirteen cities postedrndouble-digit annual gains. Las Vegas and California continue to impressrnwith year-over- year increases of over 20%. Denver and Phoenix posted 20 consecutive annual increases; Miami and Minneapolis 19. Despiternshowing 26 consecutive annual gains, Detroit remains the only city below its January 2000 index level.</p

Blitzer said the peak rate ofrngain in home prices occurred in April. rnSince then, while prices have continued to rise, the gain has been morernmoderate, slowing each month. “This month 16 cities reported smaller gains in August comparedrnto July. Recent increasesrnin mortgage rates and fewer mortgage applications are two factors in these shifts,” Blitzer said.</p

As of Augustrnaverage home prices across the U.S. had returned to mid-2004 levels.  Since peaking in June/July 2006, peak torncurrent prices are down about 20-21 percent for the two composites and theyrnhave recovered from their March 2012 lows by slightly over 22 percent.  Blizer noted, “Denver and Dallas again set new highs. All the other cities remain below their peaks.rnBoston and Charlotte are the two MSAs closest to their peaks with only 8-9% left to go. Las Vegas is still down 47.1% from its peak level.”</p

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ThernCase-Shiller numbers echo those of other studies showing that price growth isrnmoderating.  Their figures however remainrnmuch more aggressive than others recently released for August.  The Case-Shiller numbers do not claim to bernnational but rather reflects the experiences of 20 cities and all four studies userndifferent data sets and different methodologies.  Still the comparison is interesting.  The other three sets of numbers below arernfrom Lender Processing Services (LPS), CoreLogic, and the Federal Housing FinancernAgency (FHFA).  Number represent arnpercentage increase in their respective indexes.</prn<table border="1" cellpadding="0" cellspacing="0"<tbody<tr<td valign="top" width="208"

Index</p</td<td valign="top" width="170"

July to August</p</td<td valign="top" width="198"

August 2012 – August 2013</p</td</tr<tr<td valign="top" width="208"

Case-Shiller (20-City)</p</td<td valign="top" width="170"

1.3</p</td<td valign="top" width="198"

12.8</p</td</tr<tr<td valign="top" width="208"

CoreLogic</p</td<td valign="top" width="170"

0.9</p</td<td valign="top" width="198"

12.4</p</td</tr<tr<td valign="top" width="208"

LPS</p</td<td valign="top" width="170"

0.4</p</td<td valign="top" width="198"

9.0</p</td</tr<tr<td valign="top" width="208"

FHFA</p</td<td valign="top" width="170"

0.3</p</td<td valign="top" width="198"

8.5</p</td</tr</tbody</table

The S&P/Case-Shiller Home Price are constructedrnto accurately track the price path of typicalrnsingle-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,rna currentrnindex value of 150 translates to a 50 percentrnappreciation rate since January 2000 for a typical home located within the subject market.

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