Southern California house prices increased by the smallest margin in seven years during the first three months of the year, two reports confirmed Tuesday, May 28.
The S&P Case-Shiller Home Price Index reported prices were up 1.3% in the Los Angeles-Orange County region as of March. That’s the smallest housing appreciation rate for the two counties since July 2012.
L.A.-Orange County tied San Diego for lowest house-price gain among 20 U.S. metro areas tracked. San Francisco’s price gain was 1.4% as of March, third lowest.
Case-Shiller is a “repeat sales” index based on the average price gains for the most recent three months. It is derived by comparing single-family home prices to each home’s previous sale price.
Other housing reports out already show Southern California home prices leveling off after a year of annual sales declines. And the house-price cooldown is a national trend.
Both the 20-city composite index and the national index also recorded the smallest price gains since 2012.
“The patterns seen in the last year or more continue: Year-over-year price gains in most cities are consistently shrinking. Double-digit annual gains have vanished,” said David Blitzer, chairman of the S&P Dow Jones Index Committee.
Given the broader economic picture, Blitzer said, housing should be doing better. Mortgage rates for 30-year, fixed-rate loans are near 4%, unemployment is close to a 50-year low, incomes are showing moderate increases and inflation is low.
“The difficulty facing housing may be too-high price increases,” he said.
Another housing yardstick also released May 28 — indexes from the Federal Housing Finance Agency — showed a similar slowdown. This math includes information from appraisals used to approve mortgage refinancings.
For Los Angeles County, FHFA found 5.8% year-over-year gains in the first quarter. That ranked No. 109 out of 241 metros tracked. The Inland Empire had 5.7% one-year gains, No. 117 nationally. And Orange County values were up 4%, No. 170. All were the lowest readings since the end of 2012.
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