Home prices rose less than expected in February, according to S&P/Case-Shiller index.
Prices in 20 major metropolitan areas increased 0.7% from January and 5.4% year-on-year.
Economists were expecting prices to increase by 0.8% in February and by 5.5% year-over-year, according to Bloomberg.
The 20-city index came in at 182.79, a slight increase from last month’s 182.56 but below expectations.
Seattle, Denver, and Portland, Oregon, reported the biggest gains compared with the previous year.
Perhaps the most notable thing from the report is that there seem to be some bad signs for first-time buyers.
“Home prices continue to rise, although more slowly, at a largely sustainable clip,” Zillow chief economist Dr. Svenja Gudell said after the report. “But a deeper look at recent housing trends reveals a few troubling issues set to impact first-time and move-up buyers in the critical months ahead.”
“Inventory of entry-level and middle-tier homes is down sharply, and home prices in those segments are rising more quickly as demand stays strong and the economy keeps chugging along,” Gudell continued. “Entry-level and mid-market buyers – typically the housing market’s bread and butter – are likely to face stiff competition, rapidly rising prices and very limited inventory. The patience of many buyers will be tested in coming months.”
On the flip side, she added, inventory at the top of the market is more available, and prices are growing more slowly there. So folks looking to buy the most expensive homes will have a larger selection, less competition, and “somewhat softening prices.”
Another notable thing from the report is that San Francisco is no longer among the three cities with the biggest gains in home prices. As Business Insider’s Akin Oyedele recently noted, the real-estate company RealtyTrac showed that prices fell year-over-year in San Francisco by 2% after 47 straight months of increases.
S&P Dow Jones Indices noted that home prices continued to rise twice as fast as inflation, though it said “the pace is easing off in the most recent numbers.”
- S&P Dow Jones Indices & CoreLogic