United States: Slide in home prices shows signs of leveling off in December

In December, the unadjusted S&P/Case-Shiller 20-city home price composite index rose 0.1% over the previous month. The result contrasted the 0.2% decline registered in the previous month and the 0.1% decrease that was expected by the market.

Home prices rose 4.5% over the same month of the previous year, which was up from the 4.3% rise recorded in November. This marked the first acceleration in annual gains since November 2013. S&P pointed out that annual price increases were greater in 12 of the 20 cities surveyed.

However, according to S&P, “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. 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.”