Year-over-year growth rates in home prices across the nation declined in November, recording a 4.7 percent gain compared to 4.6 percent in October, according to the just-released update from S&P/Case-Shiller’s closely watched index.
The index covers all nine U.S. census divisions. The national index, and the S&P/Case-Shiller 20-city and 10-city indices, were all marginally negative in November on a month-to-month basis.
The 10 and 20-city composites reported declines of -0.3 percent and -0.2 percent, while the national index saw a decline of -0.1 percent for the month. Tampa led all cities in November with an increase of 0.8 percent.
Miami and San Francisco continue to lead all cities, posting gains of 8.6 percent and 8.9 percent over the last 12 months. Nine cities, including Tampa, Atlanta, Charlotte, and Portland, saw annual growth rates climb more than other cities in November. Twelve-month growth rates for Detroit and Miami dropped the most among all 20 cities.
These areas will likely continue strong home-price growth in 2015, says David Blitzer, managing director and chairman of the Index Committee at S&P Dow Jones Indices. But across most of the nation, home-price gains will likely continue to diminish or hold steady.
“Prospects for a home run in 2015 aren’t good. Strong price gains are limited to California, Florida, the Pacific Northwest, Denver, and Dallas. Most of the rest of the country is lagging the national index gains. Moreover, these price patterns have been in place since last spring. Existing home sales were lower in 2014 than 2013, confirming these trends.”
Challenges for the housing market include continued low inventory levels and stiff mortgage qualification standards, Blitzer said. Distressed sales and investor purchases for buy-to-rent declined somewhat in the fourth quarter.
On the positive side, mortgage rates continue to slide below 4 percent for now. And consumer confidence, helped by cheap gasoline prices, is strong, he said.