Home Prices Still Rising, but Pace Slows; Consumers Gloomier
- Feb 26, 2014
Nationwide, home prices closed 2013 up 11.3 percent compared with 2012, according to the latest S&P/Case-Shiller Home Price Indices, which S&P Dow Jones Indices released on Tuesday. That represents a slight improvement over last quarter’s annualized rate of 11.2 percent. But things seem to be slowing down otherwise: during the fourth quarter of 2013, the National Index declined 0.3 percent compared with the third quarter.
In December, Case-Shiller’s 10-city composite index remained relatively unchanged, while the 20-city composite showed its second consecutive monthly decline of 0.1 percent. Year over year, the 10-city and 20-city composites posted gains of 13.6 percent and 13.4 percent, respectively, in December.
Some cities are still doing quite well in terms of home-price rises. Chicago, for example, showed its highest year-over-year return since December 1988. Dallas set a new peak and posted its largest annual gain since the inception of the index for Dallas in 2000. On the other hand, Denver declined 0.1 percent and is now 0.7 percent below its all-time index high, which was set in September 2013.
After 26 months of consecutive gains, Phoenix posted a drop of 0.3 percent for December, its largest decline since March 2011. Phoenix once led the recovery from the bottom in 2012, but Las Vegas, Los Angeles and San Francisco were the top three performing cities of 2013, with gains of more than 20 percent.
“The S&P/Case-Shiller Home Price Index ended its best year since 2005,” David Blitzer, chairman of the Index Committee at S&P Dow Jones Indices, said in a statement. “However, gains are slowing from month to month and the strongest part of the recovery in home values may be over.”
Consumers a Little Gloomier
The Conference Board said on Tuesday that its Consumer Confidence Index, which had increased in January, fell moderately in February. The index now stands at 78.1 (1985 = 100), down from 79.4 in January. The decline was driven by the Expectations Index, which dropped to 75.7 from 80.8. The Present Situation Index, by contrast, climbed from 77.3 to 81.7.
Consumers claiming business conditions are “good” increased from 20.8 percent last month to 21.5 percent, while those claiming business conditions are “bad” declined from 23.4 percent to 22.6 percent. Consumers’ assessment of the labor market also improved. Those claiming jobs are “plentiful” increased to 13.9 percent from 12.5 percent, while those saying jobs are “hard to get” decreased slightly to 32.5 percent from 32.7 percent.
Wall Street suffered a modest down day on Tuesday, with the Dow Jones Industrial Average losing 27.48 points, or 0.17 percent. The S&P 500 and the Nasdaq were both down 0.13 percent.