Single-family home prices declined 0.3% in the New York region in April, the first slump in seventeen months according to the seasonally adjusted Case-Shiller Home Price Index. This was a significant decline from March, when prices increased 0.4%. Year over year price increases for New York declined from 6.5% in March to 5.4% in April. Nationally, home prices continued to increase in April but in most markets did so at a significantly lower pace than in March: the 20-city composite index increased just 0.2% in April compared to 1.2% in March, while year over year price changes were 12.3% in March but 10.8% in April.
The Chairman of the Index Committee, David Blitzer, stated the following: “Near term economic factors favor further gains in housing: mortgage rates are lower than a year ago, the Fed is expected to keep interest rates steady until mid-2015 and the labor market is improving. However, housing is not back to normal: prices are being supported by cash sales, low inventories and declining foreclosure and REO sales. First time home buyers are not back in force and qualifying for a mortgage remains challenging. The question is whether housing will bounce back before the Fed begins to tighten sometime next year.”
Despite April’s decline in home prices, New York remains the seventh most expensive of the 20 markets measured by the index. California cities remain among the fastest growing as well as the most expensive. Boston, where prices are only slightly higher than in New York, experienced the highest increase in the country in April at 1.9%.