Residential Price Appreciation Eases in 19 of top 20 U.S. Housing Markets

---

According to the July 2014 S&P/Case-Shiller Home Price Indices, there was a significant slowdown in U.S. home price increases. Nineteen of the 20 cities saw lower annual returns in July. Las Vegas, Miami and San Francisco were the only cities to report double-digit annual gains. Cleveland's rate remained unchanged at +0.9% for the 12 months ending July 2014.
 
In July, the 10-City and 20-City Composites increased 0.6% and the National Index 0.5%. Although all cities but one gained on a monthly basis, 17 saw smaller increases in July as compared to last month. Although New York saw a lower gain this month, it was the only city where prices rose over one percent. San Francisco posted its largest decline of 0.4% since February 2012.
 

 
The chart above depicts the annual returns of the U.S. National, the 10-City Composite and the 20-City Composite Home Price Indices. The S&P/Case-Shiller U.S. National Home Price Index, which covers all nine U.S. census divisions, recorded a 5.6% annual gain in July 2014. The 10- and 20-City Composites posted year-over-year increases of 6.7%.
 
"The broad-based deceleration in home prices continued in the most recent data," says David M. Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices. "However, home prices continue to rise at two to three times the rate of inflation. The slower pace of home price appreciation is consistent with most of the other housing data on housing starts and home sales. The rise in August new home sales -- which are not covered by the S&P/Case-Shiller indices - is a welcome exception to recent trends.
 
"The 10- and 20-City Composites gained 6.7% annually with prices nationally rising at a slower pace of 5.6%. Las Vegas, one of the most depressed housing markets in the recession, is still leading the cities with 12.8% year-over-year. Phoenix, the first city to see double-digit gains back in 2012, posted its lowest annual return of 5.7% since February 2012.
 
"While the year-over-year figures are trending downward, home prices are still rising month-to-month although at a slower rate than what we are used to seeing over the past couple of years. The National Index rose 0.5%, its seventh consecutive increase. At the bottom was San Francisco with its first decline this year and the only city in the red. New York tended to underperform over the past few years but it was on top for the last two months."
 

 
The chart above shows the index levels for the U.S. National Home Price Index, as well as its annual returns. As of July 2014, average home prices across the United States are back to their levels posted in the spring of 2005. The National Index was up 0.5% over June 2014 and 5.6% above July 2013.
 

 
The chart above shows the index levels for the 10-City and 20-City Composite Indices. As of July 2014, average home prices across the United States are back to their autumn 2004 levels. Measured from their June/July 2006 peaks, the peak-to-current decline for both Composites is approximately 16-17%. The recovery from the March 2012 lows is 28.6% and 29.3% for the 10-City and 20-City Composites.
 
While all cities continue to continue to post year-over-year gains, not one managed to show improvement. San Francisco decelerated the most from an annual return of +13.2% last month to +10.3% in July. Cleveland remained steady at +0.9% year-over-year and continued to underperform the other MSAs by a wide margin.
 
San Francisco declined 0.4%, but the rest of the cities saw gains ranging from 0.1% to 1.1%. Miami was the only city to show improvement from +0.6% in June to +0.8% in July. Charlotte and Cleveland remained at 0.4% and 0.5%, respectively. Dallas and Denver continue to set new peaks while Detroit remains the only city below its January 2000 value.