Economy Watch: Home Values Still Rising, But Not As Fast
- May 28, 2014
S&P Dow Jones Indices released the latest S&P/Case-Shiller Home Price Indices on Tuesday (based on data through March), which showed that the 10-City and 20-City Composite Indices gained 0.8 percent and 0.9 percent respectively month-over-month. Nineteen of the 20 cities showed positive returns in March—New York was the only city to decline. Dallas and Denver reached new index peaks.
In March, the both the National and Composite Indices saw their annual rates of gain slow significantly. The S&P/Case-Shiller U.S. National Home Price Index, which covers all nine U.S. census divisions, recorded a 10.3 percent gain in Q1 2014 compared with the first quarter of 2013. The 10- and 20-City Composites posted year-over-year increases of 12.6 percent and 12.4 percent respectively in March.
“The year-over-year changes suggest that prices are rising more slowly,” David M. Blitzer, chairman of the Index Committee at S&P Dow Jones Indices, notes. “Annual price increases for the two Composites have slowed in the last four months and 13 cities saw annual price changes moderate in March. Among those markets seeing substantial slowdowns in price gains were some of the leading boom-bust markets, including Las Vegas, Los Angeles, Phoenix, San Francisco and Tampa.”
Despite signs of decelerating prices, all cities were higher than a year ago and all but New York were higher in March than in February. However, only Denver and Dallas have set new post-crisis highs, and they experienced relatively lower peak levels than other cities. Four locations are fairly close to their previous highs: Boston, Charlotte, Portland and San Francisco.
Consumers a little more confident
The Conference Board reported on Tuesday that its Consumer Confidence Index, which had decreased in April, improved moderately in May. The index now stands at 83.0 (1985 = 100), up from 81.7 in April. The Present Situation Index increased from 78.5 to 80.4, while the Expectations Index edged up from 83.9 to 84.8.
Consumers’ assessment of present-day conditions improved in May. Respondents saying business conditions are “good” dropped from 22.2 percent to 21.1 percent, while those stating business conditions are “bad” dropped from 24.8 percent to 24.1 percent. Consumers’ assessment of the labor market was more favorable. Those claiming jobs are “plentiful” rose from 13 percent to 14.1 percent, while those claiming jobs are “hard to get” decreased slightly, from 32.8 percent to 32.3 percent.
The monthly survey, based on a probability-design random sample, is conducted for the Conference Board by Nielsen. The cutoff date for the preliminary results was May 14.
Wall Street bounced to new highs on Tuesday, with the Dow Jones Industrial Average gaining 69.23 points, or 0.42 percent. The S&P 500 was up 0.6 percent and the Nasdaq advanced 1.22 percent.