Home prices in 20 U.S. cities rose at a slower pace in the year ended in November, a sign the industry struggled to find momentum even amid low mortgage rates.
The S&P/Case-Shiller index of property values increased 4.3 percent from November 2013 after rising 4.5 percent in the year ended in October, the group said Tuesday in New York. The median projection of 28 economists surveyed by Bloomberg called for a 4.3 percent year-over-year advance. Nationally, prices rose 4.7 percent after a 4.6 percent gain in the year ended in October.
Property prices slowed over the last year as home sales cooled, with demand stymied by sluggish wage growth and less household formation. More moderate price gains, combined with improvement in the labor market and low borrowing costs, may enable a wider swath of Americans to become buyers, providing a needed jolt to the industry.
“Home-price appreciation continued last year, but at a slower pace compared with 2013,” said Ryan Wang, an economist at HSBC Securities USA Inc. in New York and the second-best forecaster of the Case-Shiller index over the last two years, according to data compiled by Bloomberg. “Going into this year, we’ll see a moderate increase in home prices. Mortgage rates have fallen, and that may help sales pick up a bit.”
All 20 cities in the index showed a year-over-year increase, led by gains of 8.9 percent in San Francisco and 8.6 percent in Miami. Among cities whose annual growth rates climbed the most in November were Tampa, Florida; Atlanta; Charlotte, North Carolina; and Portland, Oregon. Cleveland showed the smallest increase, at 0.6 percent.
“Strong price gains are limited to California, Florida, the Pacific Northwest, Denver, and Dallas,” David Blitzer, chairman of the S&P index committee, said in a statement. “Most of the rest of the country is lagging the national index gains.”