Economic Report: Home prices were flat in April, Case-Shiller says

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Home price growth slowed to just 2.5% year-over-year in April, the slowest growth in over six years.

The numbers: The S&P CoreLogic Case-Shiller 20-city index was unchanged in April compared to March on a seasonally adjusted basis, and was 2.5% higher compared to a year ago. That was the 13th straight month in which annual growth slowed, and the lowest pace of annual price gains since August 2012.

What happened: Home prices continue to rise, but at a much slower pace. The cities with the strongest annual gains are still those in warm climates which were among the areas hardest-hit by the housing crisis: Las Vegas, Tampa, and Phoenix. But their rates of price growth are hardly the double-digit gains enjoyed by Seattle, San Francisco, and others not that long ago.

Read: Mom-and-pop landlords push investor share of home purchases to 19-year high

Big picture: A slower pace of price gains should help attract buyers, particularly those who have been frustrated by a competitive and pricey housing market. But at a certain point, would-be buyers will shy away from pulling the trigger at the “top” of the market, if they believe prices are likely to start falling.

Still, while the overall 20-city data point to a slowdown, the individual numbers are not bad. The slowest monthly pace of change was in New York, which was flat, while the slowest annual growth was in Seattle, also unchanged.

Metro area Monthly change Annual change
Atlanta 1.0% 4.9%
Boston 1.9% 3.9%
Charlotte 1.0% 4.2%
Chicago 1.2% 1.9%
Cleveland 0.7% 3.5%
Dallas 0.6% 2.7%
Denver 0.8% 3.8%
Detroit 1.6% 3.5%
Las Vegas 0.6% 7.1%
Los Angeles 1.0% 1.5%
Miami 0.1% 3.9%
Minneapolis 1.0% 3.0%
New York 0% 2.1%
Phoenix 0.8% 6.0%
Portland 1.1% 2.6%
San Diego 0.5% 0.8%
San Francisco 1.6% 1.8%
Seattle 1.1% 0%
Tampa 0.7% 5.6%
Washington 0.9% 2.6%

What they’re saying: Just last month, David Blitzer, who ran the index committee at S&P Dow Jones Indices, which compiles and distributes the index, bemoaned the state of housing. “Given the broader economic picture, housing should be doing better,” Blitzer said.

A lot has changed since then, thanks mostly to unsettled geopolitics that may be hastening the end of the longest economic expansion on record.

“A combined slump in house prices and housing investment in the major economies could cut world growth to a 10-year low of 2.2% by 2020 – and to below 2% if it also triggered a tightening in global credit conditions,” said economists at Oxford Economics in a Monday note. “Signs of a global house price downturn are already visible, with around a third of our sample of economies seeing falling prices and world residential investment starting to decline. High house price valuations add to the risk that this downturn will deepen in the coming quarters, hitting consumer spending.”

Market reaction: The yield on the benchmark U.S. 10-year Treasury note TMUBMUSD10Y, -0.77%   has fallen nearly 60 basis points since the start of the year, giving a boost to house hunters.

Read: Another real estate evolution: New Redfin program will enable home purchases with no agent

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