Three Data Sets Concur on Continuing but Slower Price Increases

All three home price surveys released this morning showedrnprices increased in March, a more moderate improvement than in previous months inrnsome cases, but still broad based.  ThernS&P Case-Shiller Home Price Indices, showed that prices increasedrnmonth-over-month in 19 of the 20 cities it tracks, Black Knight in 49 states, andrnFHFA said 42 states and the District of Columbia posted increases in the firstrnquarter of 2012.</p

The Case-Shiller 10 City Composite Index gained 0.8 percentrnin March and the 20-City was up 0.9 percent. rnThe quarterly National Index rose 0.2 percent in the first quarter ofrn2013.  San Francisco’s HPI increased anotherrn2.4 percent in March and Dallas and Denver set new index peaks with Marchrnincreases of 1.2 and 1.4 percent respectively. rnNew York was the only city among the 20 to decline, posting a 0.3rnpercent drop, for March but all 20 cities had positive annual returns althoughrn13 of the 20 posted lower annual returns in March than in February.</p

The annual gains in both the National and Composite indicesrnslowed significantly.  The National Indexrngained 10.6 percent from March 2013 to March 2013 while the 10-City increasedrn12.6 percent and the 20-City 12.4 percent.  In the fourth quarter the National Index wasrnup 11.3 percent on an annual basis while in February the 10-city and 20-Cityrnhad annual increases of 13.1 percent and 12.9 percent respectively.  Chicago showed its highest year-over-year return since December 1988, 11.5%.  Las Vegas and San Francisco, the cities with the highest returns,rnsaw their rates of gain slow to approximately 21%; their post-crisis peak returns were 29.2% and 25.7%. At the lower end was Clevelandrnwith a gain of 3.9% inrnthe 12 months endingrnMarch 2014.</p

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The year-over-year changes suggest that prices are rising more slowly,” says David M. Blitzer,rnChairman of the Index Committee at S&PrnDow Jones Indices.rn”Annual price increases for the two Composites have slowed in the last four months and 13 cities saw annual price changes moderate in March. The NationalrnIndex also showed decelerating gains in the last quarter. Among those marketsrnseeing substantial slowdowns in price gains were some of the leading boom-bust markets includingrnLas Vegas, Los Angeles,rnPhoenix, San Francisco and Tampa.</p

Housing indicators remain mixed, Blitzer said.  “April housing startsrnrecovered the drop in March but virtually all the gain was in apartment construction, not singlernfamily homes. New home sales also rebounded from recent weaknessrnbut remain soft. Mortgage rates are near a seven month low butrnrecent comments from the Fed point to bank lendingrnstandards as a problem. Other comments include arguments that studentrnloan debt is preventing many potential first time buyers from entering the housing market.”</p

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As of the first quarterrnof 2014, average home prices across the United States are back to the levels posted in the spring of 2004. At the end of the first quarter of 2014, the National Index was up 0.2% over the fourthrnquarter of 2013 andrn10.3% above the first quarter of 2013. The two composite indices havernreturned to mid-2004 levels and measured from the June/July 2006 peaks are downrnapproximately 19-20 percent and have recovered by about 24 percent from the Marchrn2012 troughs.  </p

FHFA’s HPI rose 0.7 percent fromrnFebruary to March compared to a 0.6 percent increase in January.  The annual increase was 6.5 percent.  As noted there were first quarter increasesrnin the HPI in 42 states and the District of Columbia compared to increases inrn38 states during the fourth quarter of 2013. rnIt was the 11^th consecutive quarter the FHFA HPI hasrnincreased and the monthly seasonally adjusted purchase-only index for the U.S.rnhas increased for 23 of the last 24 months</p

The states with the strongest annualrnappreciation were Nevada, the District of Columbia, California, Arizona, andrnFlorida.  Among the nine census divisionsrnthe Pacific Division had the strongest increase in the first quarter with a 2.1rnpercent increase and the region was up 13.2 percent from the previousrnyear.  On the monthly basis however thernPacific region had only a 0.4 percent increase, well below the national averagernand the 4.6 percent jump in New England and 1.2 percent in the West NorthrnCentral region.</p

There were first quarter pricernincreases in 71 of the 100 metropolitan areas tracked by FHFA with thernstrongest increase, 10.7 percent, in the Charleston, South Carolina area andrnthe weakest in New Orleans, down 2.6 percent.</p

Black Knight said that its HPI for thernnation as a whole was $235,000 in March, a 1 percent increase from the previousrnmonth and 12.8 percent below the peak in the index, $269,000, reached in Junern2006.   Colorado and Texas establishedrnnew peak HPI’s in March as they have done virtually every month since lastrnsummer.  </p

Michigan and the District of Columbiarnhad the largest month-over month increases at 1.6 percent each, followed byrnfour states, Washington, Oregon, Illinois, and Georgia that increased 1.5rnpercent.  Missouri and North Dakota wererneach up 1.3 percent and Minnesota and Nevada 1.2 percent.  </p

Connecticut was the only state wherernthe HPI declined from February to March, a slight loss of 0.1 percent.  Three other New England states, while inrnpositive territory, posted the worst performances in the country.  Rhode Island increased 0.1 percent, Vermontrn0.2 percent, and New Hampshire 0.3 percent.

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