Just In: Housing Price Gains Stalling

Hot of the press release from Case-Shiller/S&P/Dow Jones:

imageNew York, June 24, 2014 – Data through April 2014, released today by S&P Dow Jones Indices for its S&P/Case-Shiller1 Home Price Indices, the leading measure of U.S. home prices, show that the 10-City and 20-City Composites posted annual gains of 10.8%.

(The chart above depicts the 10-City Composite and the 20-City Composite Home Price Indices. In April 2014, the 10-City and 20-City Composites posted year-over-year increases of 10.8%.)

This is a significantly lower rate when compared to last month. Nineteen of the 20 cities saw lower annual gains in April than in March. California (Los Angeles, San Diego and San Francisco) saw their returns worsen by approximately three percentage points. Boston was the only city to see its annual rate improve.

The 10-City and 20-City Composites increased 1.0% and 1.1% in April. Seven cities – Cleveland, Las Vegas, Los Angeles, Miami, Phoenix, San Diego and San Francisco – reported lower returns than in March. Boston rose 2.9%, its largest monthly gain in over its 27 years of history. San Francisco rose 2.3%, its sixth consecutive price increase.

“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%, now all are below 20%: Las Vegas (18.8%), Los Angeles (14.0%), Phoenix (9.8%), San Diego (15.3%) and San Francisco (18.2%). Other cities around the nation are also experiencing slower price increases.

“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% or more. Dallas and Denver gained 1.6% and continue to set new peaks. Boston and Charlotte are less than 10% 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.”


The prices chart is the one I watch most closely:  With today’s prices, the economy is pricing housing as though it were 2004.  But remember our usual warning here:  These are sale price to sales price.  If you’re actually planning to sell, think of it more like 2003 prices becausae it can cost 10% in sales commission and moving costs.

Stock futures are flat to down 12 on the Dow…