November Home Price Rise Smaller Than Expected

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The S&P/Case-Shiller home price index for November was higher for the eighth consecutive month. The 20-city composite rose 5.5% in November, lower than the consensus expectation for a rise of 5.8%, but still well above the October increase of 4.3%. On an annual basis, November prices were up 4.5% on the 10- and 20-city composite. From their peaks in June/July 2006, both the 10- and 20-city composites are down about 30% through November.

The 20-city composite posted a negative monthly return of 0.1% while the 10-city composite posted a negative return of 0.2%. Chicago, Boston and New York have posted monthly declines in six of the past 12 months.

The chairman of the S&P index committee said:

Winter is usually a weak period for housing which explains why we now see about half the cities with falling month-to-month prices compared to 20 out of 20 seeing rising prices last summer. The better annual price changes also point to seasonal weakness rather than a reversal in the housing market. Further evidence that the weakness is seasonal is seen in the seasonally adjusted figures: only New York saw prices fall on a seasonally adjusted basis while Cleveland was flat.

Phoenix continues to lead the recovery in house prices, up 22.8% year-over-year, while only New York has posted an annual decline of 1.2%. Chicago’s year-over-year growth is a scant 0.8%.

S&P also notes the general direction:

Housing is clearly recovering. Prices are rising as are both new and existing home sales. Existing home sales in November were 5.0 million, highest since November 2009. New Home sales at 398,000 were the highest since June 2010. These figures confirm that housing is contributing to economic growth.

The full press release is available here.

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