Home Prices Rise But Show Signs Of Slowing

Dated: April 29 2014

Views: 342

The country's major cities continue to see rising home prices, even in the face of weaker sales.

Home prices were flat in February across 20 major U.S. cities, according to the Standard & Poor's/Case Shiller home price index released Tuesday. But they hovered at a level 12.9 percent higher than the same month a year earlier.

In the Portland area, prices rose 0.8 percent for the month and 13.3 percent from a year ago.
All 20 cities included in the home-price survey showed year-over-year increases. Portland was one of seven to see home prices rise on a monthly basis in February, while 13 saw declines, which are typical for the season.
"On a month-to-month basis, there is clear weakness," said David Blitzer, the index committee chairman. "Seasonally adjusted data show prices rose in 19 cities, but a majority at a slower pace than January."
The slowing home-price gains are taken as good news by some economists who feared the housing market was overheating. Combined with higher mortgage rates, the rapid increase in prices risks pricing out a significant number of potential buyers.
"Homeownership still represents a good bargain for those that can afford it and can find a suitable home," said Stan Humphries, chief economist at Zillow. But affordability issues are becoming an issue in a few markets, and those problems will only get worse as mortgage interest rates rise."
Other figures show the national housing market remains fragile.
Nationwide, home-sales numbers have weakened over recent months, even accounting for what's typically a slow season. That suggests a cooling market, and perhaps one limited by the a small inventory of homes for sale.
In the Portland area, recent numbers are mixed. Pending sales fell in the year's first quarter compared with the same period a year ago, according to the Regional Multiple Listing Service, but closed sales still outpace year-ago figures.
And Portland-area home prices are rising at a faster rate than much of the rest of the country.
"There are a lot of very real supply constraints," said Tim Duy, a University of Oregon economist. "The demand is still there, despite the higher prices and the higher interest rates."
That's largely because single-family home construction hasn't significantly picked up to add to the supply and ease some of the the pressure on prices, Duy said.
"We had an underbuilding period combined with relatively low prices and relatively low interest rates," he said. "All of that combines to propel prices up pretty steeply. I'm not seeing the degrees of unaffordability we had in the housing boom."
The Case-Shiller index is released on a two-month delay and based on a three-month rolling average, so the numbers released Tuesday reflect data collected in December, January and February.
Blog author image

Mark Ross

For Mark Ross, founder of Ross NW Real Estate and professional real estate broker, real estate has always been the career of choice. During his 30 years in the industry, Mark has gained experience in ....

Latest Blog Posts

10 Ways To Save On A Kitchen Remodel

A kitchen remodel is among the most popular renovation projects for homeowners, but it can quickly become the most expensive. According to HomeAdvisor, the average kitchen remodel costs $25,656, or

Read More

6 Mortgage Tips For Single Homebuyers With Children

If you’re a single parent, it’s arguably more challenging to buy a home than for those in a partnership with dual incomes. Yet it’s easy to see why so many single parents are eager to purchase

Read More

How To Deal With Unsolicited Offers

If you’re one of those lucky people who own a home in a “hot” area, it’s a pretty sweet feeling. You made a good real estate call. If you decide to sell, all signs point to it being an easy

Read More

Homebuying And Mortgage Guide For Singles

Many people might picture homeownership as an event that happens only after two people get married and start a financial partnership. Some mortgages are still structured to reflect that idea. But

Read More