Home Price Growth Flattens in April

Home Price Growth Flattens in April

Home Price Growth Flattens in April

The FINANCIAL -- Home prices slowed in April, according to a report released on June 30, highlighting that the housing recovery remains bumpy.

The S&P/Case-Shiller home price index, covering the entire nation, rose 4.2% in the 12 months ended in April, weaker than a 4.3% increase in March, according to Nasdaq.

The 10-city and 20-city indexes saw weaker increases in April than in March. The 10-city index gained 4.6% from a year earlier, compared with 4.7% in March. The 20-city index gained 4.9% year-over-year, compared with a 5% increase in both March and February.

Economists surveyed by The Wall Street Journal expected a 5.6% increase to the 20-city index.

"Home prices continue to rise across the country, but the pace is not accelerating," said David Blitzer, managing director and chairman of the Index Committee at S&P Dow Jones Indices.

Month-over-month home price gains were tepid, according to the report. Not seasonally adjusted, the U.S. index rose 1.1% from March to April. The 10-city index saw a 1% month-over-month change and the 20-city index saw a 1.1% change over the month.

After seasonal adjustment, the national index was unchanged and the 10- and 20-city composites were up 0.3% and 0.4%.

The Case-Shiller index offers a lagging read on how the housing market, showing how it was performing more than a month ago. April was a weak month for housing, according to data released earlier by the National Association of Realtors, but the market has picked up momentum since then.

Economists are predicting the 2015 could be the best year for the housing market since the crisis, as more first-time home buyers enter the market and wages improve. The National Association of Realtors is predicting that prices in 2015 will surpass their 2006 peak—although factoring a decade later those prices are more modest.

Indeed, after a huge boom and bust economists said that they are hopeful the housing market is finally settling down into healthy levels of growth.

"It's the most normal it's been since the early 2000s," said David Berson, chief economist at Nationwide Insurance.

Still, new-home construction is well below typical levels, contributing to a shortage of inventory that has been driving up prices in hot markets such as Denver and San Francisco. Those cities reported the highest year-over-year gains with price increases of 10.3% in Denver and 10%, in San Francisco over the last year.

"We're not quite normal yet," Mr. Berson said.