Home prices plateaued in Southern California and across much of the country, according to new figures out Tuesday morning.
The average sale price of a home in metro Los Angeles grew seven-tenths of one percent in April compared with March, according to the Case-Shiller Home Price Index. The average was up 14% compared with April 2013, the slowest annual price growth since Feb. 2013.
The numbers were similar nationally, where Case-Shiller's 20-city composite index rose 1.1% in April and 10.8% compared with the year-earlier period, the slowest gain in 13 months. Price growth slowed in 19 of the 20 cities the index tracks.
The numbers were echoed in a separate report from the Federal Housing Finance Agency, which, using a slightly different measurement, showed home prices flat from March to April nationwide. It's just the second time in 18 months they have not increased.
It's the latest evidence that the housing market's recovery slowed this spring. While home prices keep climbing, they're climbing far slower than last spring, when some markets reported annual increases of nearly 30% as foreclosures and other distressed inventory got snapped up.
Now that rush is over. But it's still unclear if so-called "regular" buyers will be stepping in — despite still-low mortgage rates and an improving job market.
"Housing is not back to normal," said David Biltzer, chairman of the Index Committee at S&P Dow Jones Indices. "First-time homebuyers 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 [interest rates] sometime next year."
Still, some economists noted that last year's price run-up was unsustainable, and unsupported by the fundamentals of the economy. More modest gains, or even flat prices, could be healthier for homebuyers.
Gus Faucher, senior economist with PNC Financial Services, predicted this slower-but-steady growth will continue through the rest of the year. That, he said, is a good thing for the market.
"Price growth will slow to a low-to-mid single-digit pace over the rest of the year and into 2015," he said. "This is roughly equal to income growth, and thus is sustainable over the longer run."