Economy Watch: Case-Shiller Shows Continuing Home Price Rises
- Sep 25, 2013
On Tuesday S&P Dow Jones Indices released the latest S&P/Case-Shiller Home Price Indices, which track U.S. home prices through the end of July (not August), and they showed continued increases. The 10- and 20-city composite indexes recorded increases of 1.9 percent and 1.8 percent respectively when compared with June. For at least four months in a row, all 20 cities showed have monthly gains, with Phoenix a stand out in that way, posting 22 consecutive months of positive returns.
Over the last 12 months, the rises were even more pronounced. According to Case-Shiller, home prices rose 12.3 percent and 12.4 percent year-over-year in July for the 10- and 20-city composites.
“Home prices gains are holding their 12 percent annual rate of gain established by the two composite indices in April,” David M. Blitzer, chairman of the Index Committee at S&P Dow Jones Indices, noted in a press statement. The Southwest continues to lead the housing recovery. Las Vegas home prices are up 27.5 percent year-over-year, while in California, San Francisco, Los Angeles and San Diego are all up more than 20 percent. Still, all these markets remain far below their peak levels.
Although home prices increased for the month in all 20 cities, there’s fairly strong evidence that the rate of increase is slowing down. Fifteen cities and both composites saw their monthly rates decelerate in July versus June. “More cities are experiencing slow gains each month than the previous month, suggesting that the rate of increase may have peaked,” Blitzer said.
State coincident indexes still mostly positive
The Federal Reserve Bank of Philadelphia released coincident indexes for the 50 states for August 2013 on Tuesday. In the past month, the indexes increased in 40 states, decreased in five states, and remained stable in five. Over the past three months, the indexes increased in 42 states, decreased in six and remained stable in two.
The coincident indexes combine four state-level indicators to summarize current economic conditions in a single statistic. The four state-level variables in each coincident index are nonfarm payroll employment, average hours worked in manufacturing, the unemployment rate and wage and salary disbursements deflated by the CPI. During periods of recovery, the indexes tend to be positive in most if not all the states, while the reverse is true during periods of contraction.
Wall Street lost ground again on Tuesday, perhaps as talk of a federal government shutdown—or worse, a default—has increased in volume in recent days. In any case, the Dow Jones Industrial Average was off 66.79 points, or 0.43 percent, while the S&P 500 dropped 0.26 percent. The Nasdaq managed to eke out a 0.08 percent gain, however.