S&P: Home Price Growth Slowest in Nearly Ten Years

Data released today by Standard & Poor’s for its S&P/Case-Shiller Home Price Indices, a leading measure of U.S. home prices in the United States, showed signs of a continued deceleration in most of the existing and newly-added metro areas. The 10-MSA aggregate index registered its fourth consecutive decline, while the yearly growth rate of 2.45 percent reported for October represents the worst yearly growth rate since March 1997, when the growth rate stood at 2.35 percent. The newly introduced 20-MSA aggregate index didn’t fare any better, showing a monthly decline for the third consecutive month, and reporting a yearly growth rate that is the worst since S&P began calculating index values in Sept. 2000. “Home price gains are continuing their steep deceleration,” said Robert J. Shiller, chief economist at MacroMarkets LLC. “With the addition of 10 metro areas, we can clearly see that the monthly price declines are wide spread nationally. Both composites, as well as 16 of the 20 metro area indices, show negative monthly returns for October and 6 metro areas have negative annual returns.” In October, Detroit surpassed Boston in the magnitude of annual declines, coming at a negative 3.6 percent — the lowest rate in its reported history. Las Vegas and Phoenix stand out among the cities in terms of the dramatic changes in the rate of price appreciation versus recent years. Las Vegas came in at 2.6 percent annual growth in October, compared to its spectacular return of 53 percent in September 2004. Phoenix reported a 4.0 percent annual return compared to it’s peak of 49 percent in September 2005. Interestingly, Seattle and Portland remain relatively strong with annual returns as high as 14.1 percent and 13.2 percent respectively. Full stats for each MSA are provided below. More information can be found at http://www.homeprice.standardandpoors.com/.