Home prices positive in latest Case-Shiller, but are there signs of a slow down?
Home prices in the Chicagoland area posted moderate gains in Standard & Poor’s latest Case-Shiller Home Price Indices, rising 1.1 percent from March to April and 2.5 percent from April 2014.
Though Chicagoland’s monthly increase was consistent with the other 20 metro areas in the Case-Shiller, its year-over-year gains were relatively low. In fact, behind Boston and Washington, where yearly increases were just 1.8 and 1.1 percent, Chicagoland had the third lowest yearly increase in the nation.
National Home Prices – Case-Shiller Home Price Indices
Nationally, the Case-Shiller offered few surprises:
- The 10- and 20-City Composites, which average home prices across the nation’s largest metro areas, rose 4.6 and 4.9 percent year-over-year, respectively. Meanwhile, the National Home Price Index, which covers all nine U.S. census divisions, rose 4.2 percent (down from a 4.3 percent increase in the previous Case-Shiller).
- Denver and San Francisco had the strongest yearly returns at 10.3 and 10 percent. Of the 20 metro areas in the Case-Shiller, nine reported faster yearly increases in April than in March.
- Month-to-month, prices rose 1.1 percent in the National Price Index, and for the 10- and 20-City Composites, prices posted respective gains of 1 and 1.1 percent; once seasonal adjustments were factored in, though, those gains declined to 0.3 and 0.4 percent.
“The Pace is Not Accelerating”
David M. Blitzer, the managing director and chairman of the Index Committee at S&P Dow Jones Indices, stated in Standard & Poor’s analysis that although prices continue to increase, two trends have emerged: one, the pace of price increases is not accelerating; and two, consumer expectations are no longer ahead of market fundamentals.
“A recent national survey published by the New York Fed showed the average expected price increase among both owners and renters is 4.1 percent,” Blitzer said. “Both the current rate of home price increases and the consumers’ expectations are a bit lower than the long term annual price change of 4.9 percent since 1975. These figures, however, do not adjust for inflation. The real, or inflation adjusted, price change since 1975 is 1 percent per year.”
So although 2015’s housing market has lacked the double-digit price increases of 2013 and early 2014, it likely represents a more sustainable, balanced future for housing.