Gains in Home Prices Slow As Sales Start to Decline
The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index reported a 5.8% annual gain in August, down from 6.0% in July, S&P Dow Jones Indices reported on Tuesday. The data shows that home prices continued their rise across the country over the last 12 months.
The annual gains fell below 6% for the first time in 12 months, the index showed.
“Following reports that home sales are flat to down, price gains are beginning to moderate,” David Blitzer, managing director at S&PDJI said.
The 10 city composite annual increase fell to 5.1% from 5.5% in July while the 20 city composite posted a 5.5% year-overyear gain in August, down from 5.9% in the previous month.
Among the 20 cities, Las Vegas, Seattle and San Francisco continued to report the highest year-over-year price gains. In August, Las Vegas led the way with a 13.9% year-over-year price increase, followed by San Francisco with a 10.6% increase and Seattle with a 9.6% gain.
“There are no signs that the current weakness will become a repeat of the crisis, however. In 2006, when home prices peaked and then tumbled, mortgage default rates bottomed out and started a three year surge,” Blitzer said. “Today, the mortgage default rates reported by the S&P/Experian Consumer Credit Default Indices are stable. Without a collapse in housing finance like the one seen 12 years ago, a crash in home prices is unlikely.”