NEW YORK CITY-By several measures, the housing market appears to be gaining steam. Data through December 2012, released Tuesday’s by S&P Dow Jones Indices for its S&P/Case-Shiller Home Price Indices, showed three leading composites ended the year with strong gains.
The national composite posted a 7.3% increase for 2012. The 10- and 20-city composites reported annual returns of 5.9% and 6.8% in 2012. Month-over-month, both the 10- and 20-city composites moved into positive territory with gains of 0.2%; more than reversing last month’s losses.
In addition to the three composites, nineteen of the 20 metropolitan statistical areas posted positive year-over-year growth; only
New York fell. Last year’s fourth quarter in the housing market was particularly robust, notes David Blitzer, chairman of the index committee at S&P Dow Jones Indices.
“Home prices ended 2012 with solid gains,” he says. “Housing and residential construction led the economy in the 2012 fourth quarter. In December’s report all three headline composites and 19 of the 20 cities gained over their levels of a year ago. Month-over-month, nine cities and both composites posted positive monthly gains. When the numbers are seasonally adjusted, there were no monthly declines across all 20 cities.
“The national composite increased 7.3% over the four quarters of 2012,” he continues. “From its low in the first quarter, it surged in the second and third quarter and slipped slightly in the 2012 fourth period. The 10-and 20-city composites, which bottomed out in March 2012, continued to show both year-over-year and monthly gains in December.”
“Atlanta and Detroit posted their biggest year-over-year increases of 9.9% and 13.6% since the start of their indices in January 1991,” Blitzer says. “Dallas, Denver, and Minneapolis recorded their largest annual increases since 2001. Phoenix continued its climb, posting an impressive year-over-year return of 23.0%; it posted eight consecutive months of double-digit annual growth.”
Meanwhile, the Federal Housing Finance Agency also issued a report Tuesday saying that US home prices had a good showing last year, rising by 1.4% during the fourth quarter. Adding to all this is the US Census Bureau, which also issued data on Tuesday. The population tracker reports that December sales were revised up to 378,000 (from 369,000).
In addition, early signs for 2013 are positive too, the agency says. New home sales rose 15.6% in January, month-over-month, to a 437,000 annual rate the Census Bureau says.
US economists Patrick Newport and Stephanie Karol, of IHS Global Insight, say in a report that while census data can sometimes be misleading, “in this case it’s OK to hi-five January’s numbers—the best sales figures since July 2008. Prior to this release (which contained upward data revisions to December sales), the new sales numbers were not rising fast enough to justify the pickup in builder sentiment and single-family housing starts over recent months.”
Their report continues, “January’s new home sales figures tell us that builders were justified in ramping up on starts and that they are likely to pick up the pace this year since inventories remain lean.”