Home prices in 20 U.S. cities rose at a slower pace in the year ended in March as the housing market began to weaken at the start of 2014.
The S&P/Case-Shiller index of property values increased 12.4% from March 2013, the smallest 12-month gain since July, after rising 12.9% in the year ended in February, a report from the group showed.
“We’re further along in the housing recovery,” and “it’s only natural that those year-on-year numbers start to go down,” said Michael Hanson, U.S. senior economist for Bank of America. “You still need to see a little bit further improvement in the labor market, you probably need to see some easing of credit conditions, maybe rates trickle down a little bit — and you’ll start to see more housing activity.”
The median projection of 28 economists surveyed by Bloomberg News called for an 11.8% advance. Estimates ranged from gains of 10.8% to 12%.
The S&P/Case-Shiller index is based on a three-month average, which means the March figure was also influenced by transactions in February and January.
Home prices adjusted for seasonal variations increased 1.2% in March from the prior month, exceeding the 0.7% median in the Bloomberg survey. Unadjusted prices rose 0.9%.
All 20 cities in the index showed a year-over-year gain, led by a 21.2% climb in Las Vegas and a 20.9% advance in San Francisco. Cleveland showed the smallest year-over-year increase, with prices rising 3.9%.