Residential real-estate prices climbed at a slower pace in the year through January than a month earlier, indicating momentum in the housing market may be cooling.
The S&P/Case-Shiller index of property values in 20 cities increased 13.2 percent from January 2013, the smallest gain since August, after rising 13.4 percent in the 12 months through December, the group said today in New York. The median projection of 30 economists surveyed by Bloomberg called for a 13.3 percent advance. Compared with the prior month, prices rose 0.8 percent.
Price appreciation on a year-over-year basis has eased in recent months as higher mortgage rates and unusually severe winter weather slowed demand for properties. Smaller increases in asking prices will help improve affordability, providing support for the residential real-estate market, which has been a source of strength for the economy.
“Prices are rising, even though we should see those gains moderating,” said Scott Brown, chief economist at Raymond James & Associates Inc., who correctly forecast the year-over-year gain. “You’re still talking about double-digit percentage increases, which aren’t going to be sustainable over the long term.”
Estimates (SPCS20Y%) in the Bloomberg survey ranged from year-over-year gains of 11.2 percent to 13.8 percent. The Case-Shiller index is based on a three-month average, which means the January figure was also influenced by transactions in December and November.