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Home-price growth slowed to its lowest level in nearly seven years in February, a clear sign that the housing market is moderating heading into spring.
The S&P CoreLogic Case-Shiller National Home Price Index, which measures average home prices in major metropolitan areas across the nation, rose 4% in the year ending in February, down from 4.2% the prior month.
Home-price growth has been slowing for nearly a year, welcome news for first-time buyers who have been struggling to get into the market. Thus far, however, the easing in price growth has yet to translate into the stronger sales that real-estate agents and economists had hoped for.
Real-estate agents say demand for buyers this spring has been strong thanks to more moderate prices and lower mortgage rates. Nonetheless, existing home sales fell nearly 5% in March.
The Case-Shiller 10-city index gained 2.6% over the year ending in February, down sharply from a 3.1% annual change in January. The 20-city index gained 3%, also a significant slowdown from an annual gain of 3.5% in January.
Economists surveyed by The Wall Street Journal expected the 20-city index to gain 2.8%.
Once-hot housing markets on the West Coast, such as Seattle and San Francisco, have slowed sharply in recent months. Instead the new drivers of the American housing market are primarily places in the south that are trying to make up significant ground lost during the bust.
Las Vegas had the fastest home-price growth in the country for the ninth straight month, at 9.7%. Phoenix had the second-fastest price growth at 6.7%, followed by Tampa at 5.4%.
Even the hottest markets in the country are still seeing a slowdown in price growth. Only one of the 20 cities in the Case-Shiller index reported a greater increase in the year ending in February compared with the year ending in January.
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