Register | Forgot Your Password? | Close

WASHINGTON (AP) - U.S. home prices fell for the second straight month in December as brutally cold weather, tight supply and higher costs slowed sales.

The Standard & Poor's/Case-Shiller 20-city home price index declined 0.1 percent from November to December, matching the previous month's decline. The index is not adjusted for seasonal variations, so the dip partly reflects slower buying as winter weather set in.

For all of 2013, however, prices rose by a healthy 13.4 percent, mostly because of big gains earlier in the year. That was the largest calendar year gain in eight years. But the year-over-year gain slowed from November's 13.7 percent pace. That's only the second time that year-over-year increases have declined since prices began recovering two years ago.

The figures come after other reports show that home sales and construction have slowed after strong gains last year. Most economists expect the housing recovery will continue this year, though likely at a slower pace.

"The market should continue its slow march back to normal, as annual (price) appreciation rates fall to more sustainable levels around 3 percent," said Stan Humphries, chief economist at real estate data provider Zillow.

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 December figures are the latest available.

"Gains are slowing ... and the strongest part of the recovery in home values may be over," said David Blitzer, chairman of the S&P's index committee. "Higher home prices and mortgage rates are taking a toll on affordability."

Even some cities in warmer areas saw declines. Home prices in Phoenix fell 0.3 percent, the first drop after 26 months of big increases.

Only six cities recorded higher prices in December: Dallas, Las Vegas, Miami, San Francisco, Tampa, Fla., and Washington, D.C. Home prices in all 20 cities rose compared with a year ago.

Mortgage rates are roughly a full percentage point higher than they were last spring, although they remain low by historical standards. Mortgage buyer Freddie Mac said last week that the average rate on the 30-year loan is 4.33 percent.

Sales of existing homes plunged in January to the slowest pace in 18 months. And builders broke ground on 16 percent fewer homes in January compared with December, the Commerce Department said this week. That was the second straight decline.

Builders also requested fewer permits in January for the third straight month, suggesting construction remained weak this month.

The declines came after existing home sales reached 5.1 million in 2013, the best showing in seven years. And builders started work on 976,000 houses and apartments last year, the most in six years.

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.

Other indexes that exclude foreclosures show smaller but steady increases.


(Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)
share this story:
Attention KTAR.com Comment Users: We have recently changed our comments boards.
We would like you to be part of the conversation and The Voice of Arizona by logging in with your Facebook, Twitter, Google+ or Disqus account. Existing KTAR (Arizona Sports) account members will need to create a Disqus account or use one of the aforementioned social media logins. Thank you.
comments powered by Disqus

World Class Arizona

  • Dignity Health

    World Class People. World Class Company. Excellent care, delivered with compassion, for all in need.
  • CopperPoint Mutual Insurance Company

    SCF Arizona has a new name. They are now CopperPoint Mutual Insurance Company.
  • Taylor Morrison

    World Class People. World Class Company. We are a national home builder committed to building homes inspired by you.
  • Go Daddy

    World Class People. World Class Company. Go Daddy is a Fortune 100 "Best Companies to Work For."
  • Avnet

    World Class People. World Class Company. Here's information on a Fortune 500 company from Arizona.

Voice For A Better Arizona

  • Working For Arizona

    The business and economics of Arizona at the start of 2014 and looking forward.
  • Arizonans In Need

    Putting a focus on charities and organizations who provide help and/or need your help to fulfill their missions.
close

Share: