Thursday, July 2nd17.5°C
26667
22952

US home prices decline in January for 3rd straight month as weather, low supply slow sales

WASHINGTON - U.S. home prices dipped in January for a third straight month, likely because of slower sales in recent months caused by cold weather, a limited supply of homes and higher mortgage rates.

The Standard & Poor's/Case-Shiller 20-city home price index, released Tuesday, declined 0.1 per cent from December to January, the same drop as the previous two months. That figure is not adjusted for seasonal variations, so the dip partly reflects weaker winter sales.

The index rose a healthy 13.2 per cent in January compared with 12 months earlier. But that is down from a 13.4 per cent increase in 2013 and is the second straight decrease.

Most economists aren't concerned about the moderation in price gains. Home prices jumped over the past two years as very low mortgage rates pushed up sales. Meanwhile, the supply of available homes remained tight. Many homeowners couldn't sell because they owed more on their mortgages than their houses were worth.

Meanwhile, investors swooped in and bid up prices in places like Las Vegas, Phoenix and other cities in the south and west.

"The home price appreciation we've been seeing is unsustainable," said Stan Humphries, chief economist for real estate data provider Zillow. "It needs to moderate over time or we risk inflating another housing bubble."

The Case-Shiller index covers roughly half of U.S. homes. The index measures prices compared with those in January 2000 and creates a three-month moving average. The January figures are the latest available.

Twelve cities reported price declines in January from the previous month. The biggest decline was in Chicago, where home prices dropped 1.2 per cent, followed by Seattle, where prices fell 0.8 per cent.

Las Vegas reported the biggest price gain, up 1.1 per cent, followed by Miami, with 0.7 per cent.

Compared with a year earlier, New York and Washington, D.C., posted their largest gains since 2006, just before the housing bubble burst.

The slowdown in price gains follows other signs that the housing recovery has hit a rough spot. Sales of existing homes in February fell to their lowest level since July 2012. And home construction slipped for the third month in a row, though builders sought the most permits in February than in any month in four years.

Mortgage rates are roughly a full percentage point higher than they were last spring, although they remain low by historical standards. The average rate on the 30-year loan is 4.32 per cent, mortgage buyer Freddie Mac said last week, down from 4.37 per cent the previous week.

Most economists expect home sales and prices to rise in 2014, particularly as the weather improves, but at a slower pace.

Humphries expects home prices will appreciate 3.4 per cent this year, roughly in line with historical averages. Zillow's home price index rose 5.6 per cent in February from a year earlier.

Some economists say the Case-Shiller figures overstate recent price gains because they include foreclosures. Foreclosed homes usually sell at steep discounts. As the proportion of those sales declines, the index rises more sharply.

The Canadian Press


Read more Business News




Recent Trending




Today's Market
S&P TSX14553.33+63.18
S&P CDNX671.49+4.40
DJIA17757.91+138.40
Nasdaq5013.12+26.26
S&P 5002077.42+14.31
CDN Dollar0.7933-0.0012
Gold1163.00-6.00
Oil57.88+0.18
Lumber288.90+0.60
Natural Gas2.81+0.03

 
Okanagan Companies
Pacific Safety0.16-0.01
Knighthawk0.010.00
QHR Technologies Inc1.52-0.01
Cantex0.04-0.01
Anavex Life Sciences0.451+0.001
Metalex Ventures0.075+0.010
Russel Metals22.73+0.05
Copper Mountain Mining1.16-0.01
Colorado Resources0.08-0.02
ReliaBrand Inc0.006-0.000
Sunrise Resources Ltd0.04+0.01
Mission Ready Services0.185+0.015
Decisive Dividend Corporation2.50+0.42

 





FEATURED Property
23424156-6267 Sunstrom Court
$629,900
more details
image2image2image2
Click here to feature your property
Please wait... loading


Active listening

Has this ever happened to you? You had an initial meeting with a prospect. You asked that prospect what seemed to be all the right questions. You had what felt to you like a good conversation, and bas...


The price of money

Money is not a commodity. By definition, a commodity is a generic product that is bought and sold on price alone. Money, Canadian bills for example, look the same, smell somewhat the same, and are ava...


TFSA strategies

Photo: Thinkstock.comThe federal government has increased the annual contribution limit of Tax-Free Savings Accounts (TFSA) to $10,000. Going forward, the annual limit will no longer be indexed to inf...

_








Member of BC Press Council


25143