Case-Shiller Index shows modest growth in home prices
The housing recovery continues, albeit modestly. The S&P/Case-Shiller composite index of house prices in 20 metro areas rose 0.8% in January (seasonally adjusted), according to a report released yesterday. Economists had predicted an 0.7% rise. On an year-to-year basis, home prices are 13.2% higher than they were in January 2013.
I’ve been hearing reports of a slowdown in house price increases (more than the usual seasonal slowdown), and perhaps this slowdown in price increases is finally showing up in the Case-Shiller index. This makes sense since inventory is starting to increase.
According to Trulia chief economist Jed Kolko, asking price increases have slowed down recently, and Kolko expects that price slowdown will “hit Feb sales prices and get reported in April index releases”.
It might take a few months, but I also expect to see smaller year-over-year price increases going forward.
Here’s McBride’s chart on nominal house prices over the last 40 years, using several different indices: