Home prices, according to Case-Shiller, rose 0.87% MoM in December (better than the expected 0.6% gain) for the biggest seasonally adjusted monthly gain since March, likely bringing the ‘housing recovery is back on track’ meme back into play (despite affordablity being a major driver of the slump in home sales). However, non-seasonally-adjusted the rise was a mere 0.1%, which nonetheless managed to snap the 3 consecutive months of sequential price declines.

Seasonally-adjusted home prices jumped most since March in December.

On an annual basis, the increase was 4.46%, above the 4.30%, and the highest annual growth since September.

And yet, despite all this, Case Shiller was anything but optimistic:

“The housing recovery is faltering. While prices and sales of existing homes are close to normal, construction and new home sales remain weak. Before the current business cycle, any time housing starts were at their current level of about one million at annual rates, the economy was in a recession” says David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices. “The softness in housing is despite favorable conditions elsewhere in the economy: strong job growth, a declining unemployment rate, continued low interest rates and positive consumer confidence.

“Movements in home prices show clear regional patterns. The western half of the nation plus Miami and Atlanta enjoyed year-over-year increases of 5% or more. San Francisco and Miami were the strongest. Dallas, Denver, Las Vegas and Atlanta also experienced solid gains. Phoenix was an exception to the western strength with only a 2.4% increase; San Diego was a bit under 5% at 4.8%. The Midwest and Northeast lagged. Boston was the strongest among this weak group with prices up 3.8%. The regional patterns and the weakness in new construction and new sales may reflect decreasing mobility – fewer people moving to different parts of the country or seeking jobs in different regions.”

Here is the full breakdown by major MSA:


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