The significant deceleration of US housing activity continued in August, according to the latest data from S&P Dow Jones Indices. Some other metrics, however, point to at least slight hope of a turnaround by year’s end.
The S&P/Case-Shiller Home Price Indices showed 5.5% and 5.6% year-over-year gains in the 10-City and 20-City Composite Indices in August. Figures for both categories tracked at 6.7% just one month before, and even that was viewed as a disappointing drop from June. All 20 of the largest US metropolitan markets saw slower growth rates in the latest round of research, with early 2014 rebound story Las Vegas reporting the sharpest decreases in the pace of home price growth even though its 10.1% growth rate is second highest. Granted, Las Vegas continues to try to dig out of one of the worst single-market holes left after the dramatic real estate crash last decade and continues to be a big boom-and-bust. However, David Blitzer, chairman of the index committee at S&P Dow Jones Indices, noted all of those markets at least continued to grow, not contract, though Cleveland came dangerously close to the line (0.8% annual growth in August 2014).
Monthly statistics showed a 0.2% monthly increase between July and August. Notable were the three markets posing price declines (San Francisco, San Diego, Charlotte). There were gains of 0.5% or better in Detroit, Dallas and Denver, however. Despite the wave of negative data, Blitzer appeared more upbeat this month than in previous ones.
“Despite softer price data, other housing data perked up,” he said. “September figures for housing starts, permits and sales of existing homes were all up…Continued labor market gains, low interest rates and slower increases in home prices should support further improvements in housing.”
- Brian Shappell, CBA, CICP, NACM staff writer