Please ensure Javascript is enabled for purposes of website accessibility

Index Pundit: Home Price Surge May Be Over

By Justin Loiseau – Feb 25, 2014 at 10:26AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Home prices increased 11.3% in 2013.

Home prices increased 11.3% in 2013, according to a S&P/Case-Shiller Home Price Index report (link opens as PDF) released today.

"The S&P/Case-Shiller Home Price Index ended its best year since 2005," said David M. Blitzer, chairman of the Index Committee at S&P Dow Jones Indices, in a statement. "However, gains are slowing from
month-to-month and the strongest part of the recovery in home values may be over."

After increasing a revised seasonally adjusted 0.6% for November, the index's 20-city home price composite added another 0.8% for 2013's final month. Analysts had expected slightly more subdued 0.6% growth for December. 

Looking at nonseasonally adjusted numbers, the report doesn't look as good. The index's 20-city home price composite dropped 0.1%, mirroring its November contraction. Year-over-year, December's growth clocked in at 13.4%, another dip from November's 13.7% YOY growth.

While Blitzer didn't discount cold weather as a reason for the recent slowdown, the chairman pointed to several trouble signs for the housing market:

Existing home sales fell 5.1% in January from December to the slowest pace in over a year. Permits for new residential construction and housing starts were both down and below expectations. Some of the weakness reflects the cold weather in much of the country. However, higher home prices and mortgage rates are taking a toll on affordability. Mortgage default rates, as shown by the S&P/Experian Consumer Credit Default Index, are back to their pre-crisis levels but bank lending standards remain strict.

link

We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
349%
 
S&P 500 Returns
115%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 11/30/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.