Residential real estate prices climbed at a slower pace in the year through January than a month earlier, indicating momentum in the housing market may be cooling.
The S&P/Case-Shiller index of property values in 20 cities increased 13.2% from January 2013 after rising 13.4% in the 12 months through December, the group said March 25 in New York. The median projection of 30 economists surveyed by Bloomberg News called for a 13.3% advance. Compared with the prior month, prices rose 0.8%.
Price appreciation on a year-over-year basis has eased in recent months as higher mortgage rates and unusually severe winter weather slowed demand for properties. Smaller increases in asking prices will help improve affordability, providing support for the residential real estate market, which has been a source of strength for the economy.
“It’s a double-edged sword — higher prices have helped push a lot of people with mortgages above water on those mortgages,” Scott Brown, chief economist at Raymond James & Associates Inc., said before the report. “But at the same time, it’s helped reduce affordability, so that’s a bit of a concern.”
Estimates in the Bloomberg survey ranged from year-over-year gains of 11.2% to 13.8%. The Case-Shiller index is based on a three-month average, which means the January figure also was influenced by transactions in December and November.