The nation's housing market cooled off faster than expected this summer, according to new figures out Tuesday.
Home prices increased 5.6% in July from the year before, according to the S&P/Case-Shiller Index. That's down from 6.3% in June and their slowest pace since November 2012. The slowdown was broad-based, with price gains cooling off in 19 of the 20 cities Case-Shiller surveys, including Los Angeles, where they grew 9% after 19 straight months of double-digit gains. As recently as December, L.A. home prices were growing at a better-than-20% annual clip.
While gains are slowing, however, prices are still trending upward. From June to July, they climbed 0.2% nationally, after seasonal adjustments were factored in, and were flat in Los Angeles.
"The broad-based deceleration in home prices continued in the most recent data," says David M. Blitzer, chairman of the Index Committee at S&P Dow Jones Indices. "However, home prices continue to rise at two to three times the rate of inflation. The slower pace of home price appreciation is consistent with most of the other housing data on housing starts and home sales.
Analysts say the slowdown reflects a market that's transitioning to a more normal pace of appreciation than the big swings of recent years, and most agree that's a healthy development. There's little on the horizon to suggest it will change soon, said Bill Banfield, vice president of Quicken Loans.
"Slow but steady is this year's theme when it comes to home price increases," Banfield said. "Unless we see a significant change in the economy, I don't see this changing in the near future."
Still, prices are leveling off below their pre-crash peak. In Los Angeles, they remain about 18% lower than their high in September 2006.