Home prices offered few surprises in the latest Case-Shiller report.
Home prices in the Chicagoland area rose 10.8 percent year-over-year in February, according to the latest Case-Shiller Home Price Indices from Standard & Poor’s.
Still, prices in the area continued to struggle by monthly measures, with Chicagoland’s 0.9 percent decline from January to February tied for the second weakest in the nation.
The Case-Shiller on the National Stage
Broadly speaking, the Case-Shiller’s national findings offered no real surprises:
- Though annual rates technically slowed, they were still quite impressive – the 10-City and 20-City Composites increased 13.1 and 12.9 percent increases, year-over-year.
- Both composites were unchanged by monthly measures.
- Thirteen of the 20 cities that S&P tracks saw their prices fall in February, and only five cities saw their annual rates improve.
An Economy Outside of Housing
David M. Blitzer, the chairman of the Index Committee at S&P Dow Jones Indices, said that home prices have continued to increase in spite of weakening economic trends.
“Despite continued price gains, most other housing statistics are weak,” Blitzer said. “Sales of both new and existing homes are flat to down. The recovery in housing starts, now less than one million units at annual rates, is faltering. Moreover, home prices nationally have not made it back to 2005. Mortgage interest rates, which jumped in May last year and are steady since then, are blamed by some analysts for the weakness. Others cite difficulties in qualifying for loans and concerns about consumer confidence. The result is less demand and fewer homes being built.”
Only when consumers fully return to the economy, Blitzer said – aka, when investors and higher-end consumers are not driving the housing market forward – will we see a try recovery.
“Five years into the recovery from the recession, the economy will need to look to gains in consumer spending and business investment more than housing,” he said. “Long overdue activity in residential construction would be welcome, but is certainly not assured.”