U.S. home prices modestly dropped 0.1 percent in December, with declining prices for a second month, including 11 out of 20 tracked cities reporting declines. According to data released Tuesday, after seasonal adjustments, home prices in December rose 0.8 percent, down a bit from 0.9 percent in November, according to S&P/Case-Shiller’s 20-city composite index.
“Gains are slowing from month-to-month and the strongest part of the recovery in home values may be over,” said David Blitzer, chairman of the index committee at S&P Dow Jones Indices. Blitzer basically ignored recent concerning data suggesting the housing market is shaky, at best.
U.S. homebuilder confidence suffered its largest one-month drop ever in the month of February, falling below the key 50 mark for the first time since May.
But there are reasons to be optimistic on the surface.
“The seasonally adjusted data also exhibit some softness and loss of momentum.” On a year-over-year basis, home prices rose 13.4 percent in December, the fastest calendar-year growth since 2005. However, the increases are fueled by a low inventory of homes available for sale. Including December, prices remained about 20 percent below the 2006 high, though certain cities, such as Dallas and Denver, recently posted fresh record highs.
