However, data through August 2014, released this week in the S&P/Case-Shiller Home Price Indices, continue to show a deceleration in home price gains. The 10-City Composite gained 5.5 percent year-over-year and the 20-City 5.6 percent, both down from the 6.7 percent reported for July. The National Index gained 5.1 percent annually in August compared to 5.6 percent in July. On a monthly basis, the National Index and Composite Indices showed a slight increase of 0.2 percent for the month of August. Detroit led the cities with the gain of 0.8 percent, followed by Dallas, Denver and Las Vegas at 0.5 percent. Gains in those cities were offset by a decline of 0.4 percent in San Francisco followed by declines of 0.1 percent in Charlotte and San Diego.
The S&P/Case-Shiller U.S. National Home Price Index, which covers all nine U.S. census divisions, recorded a 5.1 percent annual gain in August 2014. The 10- and 20- City Composites posted year-over-year increases of 5.5 percent and 5.6 percent.
“The deceleration in home prices continues,” says David M. Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices. “The Sun Belt region reported its worst annual returns since 2012, led by weakness in all three California cities — Los Angeles, San Francisco and San Diego. Despite the weaker year-over-year numbers, home prices are still showing an overall increase, as the National Index increased for its eighth consecutive month.
“The large extent of slower increases is seen in the annual figures with all 20 cities; the two composites and the national index all revealing lower numbers than last month. The 10- and 20-City Composites gained 5.5 percent and 5.6 percent annually with prices nationally rising at a slower pace of 5.1 percent. Las Vegas continues to see a sharp deceleration in their annual home prices with a 10.1 percent annual return, down just below three percent from last month. Miami is now leading the cities with a 10.5 percent year-over-year return. San Francisco, which has shown double-digit annual gains since November 2012, posted an annual return of 9.0 percent in August.
“Despite softer price data, other housing data perked up. September figures for housing starts, permits and sales of existing homes were all up. New home sales and builders’ confidence were weaker. Continued labor market gains, low interest rates and slower increases in home prices should support further improvements in housing.
As of August 2014, average home prices for the MSAs within the 10-City and 20-City Composites are back to their autumn 2004 levels. Measured from their June/July 2006 peaks, the peak-to-current decline for both Composites is approximately 16-17 percent. The recovery from the March 2012 lows is 28.8 percent and 29.5 percent for the 10-City and 20-City Composites.
All cities except Cleveland saw their annual gains decelerate. Las Vegas showed the most weakness in its year-over-year return; it went from 12.8 percent in July to 10.1 percent in August. As a result, Las Vegas lost its leadership position as it moved to second place behind Miami with a 10.5 percent year-over-year gain. San Francisco posted 9.0 percent in August, down from its double-digit return of 10.5 percent in July.
All cities except Boston and Detroit posted lower monthly returns in August compared their returns reported for July. San Francisco showed its largest decline since February 2012; it was the only city that showed a negative monthly return two months in a row from -0.3 percent in July to -0.4 percent in August.
More than 27 years of history for these data series are available, and can be accessed in full by going to www.homeprice.spdji.com.