The Home Buyer's Korner

Information presented should be used for educational purposes only.

April 1st, 2015

Guy looking up in color

Case-Shiller for Jan 2015

Case ShillerThe S&P/Case-Shiller composite index of 20 metropolitan areas gained 4.6 percent in January on a year-over-year basis after rising 4.4 percent in December. Housing remains sluggish amid a dearth of properties, as insufficient equity keeps would-be sellers from entering the market.

Any acceleration in home prices like we saw in the later part of 2013 and in the first part of 2014 could see more houses put up for sale, but we need to strike a balance that is strong enough for equity appreciation to make current owners consider listing their homes, while slow enough to keep those homes within buyers’ reach. And, the only way to do that is to address stagnant wages.

National Index, year-over-year change in prices (seasonally adjusted):
June 2013: 9.2%
July 2013: 9.7%
August 2013: 10.2%
September 2013: 10.6%
October 2013: 10.9%
November 2013: 10.8%
December 2013: 10.8%
January 2014: 10.5%
February 2014: 10.2%
March 2014: 9.0%
April 2014: 7.9%
May 2014: 7.1%
June 2014: 6.3%
July 2014: 5.6%
August 2014: 5.1%
September 2014: 4.8%
October 2014: 4.7%
November 2014: 4.7%
December 2014: 4.6%
January 2015: 4.5%

An expected interest-rate increase along with the growth gap between home prices and wages will mean an increasing share of house-hunters priced out of the market.

U.S. consumer confidence did, however, rebounded strongly in March amid optimism over the labor market while house prices increased in January. Hopeful it’s a signal that the recent slowdown in economic growth was a blip on the march to spring home shopping.

The Conference Board said on Tuesday its index of consumer attitudes rose to 101.3 this month from 98.8 in February. That was well above economists’ expectations for a reading of 96. While consumers were less optimistic about the short-term outlook, they had greater confidence in the labor market, with the share of those anticipating more jobs in the months ahead increasing significantly.

The disconnect between prices and wages can’t last indefinitely, but for now the squeeze is worse for home buyers in some metropolitan areas. Of the 20 cities included in the S&P price report, six have seen home prices surpass or rebound close to the peaks seen in 2006.

Nine cities saw price appreciation grow in January compared to December on a non-seasonally adjusted basis. Charlotte, Miami, and San Diego led the group with increases of 0.7%.

San Francisco reported the biggest monthly decrease of all 20 cities, with a decline of 0.9% compared to December. Seattle and Washington, D.C., saw monthly decreases of 0.5%.

Real Estate RecoveryNarrower measures of home prices accelerated slightly in January, but price growth, in general, has been slowing since early 2014. The home price index covering 10 major U.S. cities increased 4.4% in the year ended in January up from a 4.3% rise in December. The 20-city price index was up 4.6%. That is slightly better than 4.4% in December.

 

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