Annual home price gains pulled back sharply in April, falling short of market expectations, a report released Tuesday shows.
In its latest S&P/Case-Shiller Home Price Indices report, S&P Dow Jones Indices recorded an annual price increase of 10.8 percent among both the 10- and 20-city composites. Those figures compare to year-over-year increases of 12.6 percent and 12.4 percent, respectively.
A consensus of economists surveyed by Econoday called for a gain of 11.4 percent in the 20-city index.
Of the 20 cities tracked, 19 posted lower annual appreciation in April than in March, S&P Dow Jones reported, with only Boston coming out ahead.
"Last year some Sunbelt cities were seeing year-over-year numbers close to 30 percent, now all are below 20 percent: Las Vegas (18.8 percent), Los Angeles (14.0 percent), Phoenix (9.8 percent), San Diego (15.3 percent), and San Francisco (18.2 percent)," said David M. Blitzer, chairman of the Index Committee at S&P Dow Jones Indices. "Other cities around the nation are also experiencing slower price increases."
Monthly numbers looked slightly more encouraging: In April, the 10- and 20-city composites posted respective increases of 1.0 percent and 1.1 percent, accelerating over March. Out of the 20 cities surveyed, all reported month-over-month appreciation.
Though most markets nationwide still have some ground to make up before they return to their former peaks, higher costs and tighter credit have made it more difficult for some groups of buyers to reclaim their role in the market.
"First time buyers are not back in force and qualifying for a mortgage remains challenging," Blitzer said. "The question is whether housing will bounce back before the Fed begins to tighten sometime next year."
Recent numbers may indicate a little bit of hope on that front: On Monday, the National Association of Realtors reported a 4.9 percent month-over-month increase in existing-home sales in May—the strongest monthly increase since 2011—while the Census Bureau recorded an 18.6 percent spike in new home sales on Tuesday.