After a cooling momentum, February home prices in 20 cities, to be released by the S&P/Case-Shiller Home Prices Indices April 29, were expected to show a slight rise.
An average of estimates by 22 economists polled by Bloomberg suggests that the home prices in 20 cities increased 0.7 percent in February, 0.1 percent lower than the previous month’s increase.
The housing market was unlikely to have fully warmed up after a harsh winter, said Steven Ricchiuto, chief economist at Mizuho Securities USA Inc.
“The housing market was weakening in February,” he said, attributing the slowing pace to the bad weather and a spike in interest rates at the end of 2013.
“That had reduced demand,” Ricchiuto said, adding that he predicted a slight increase of 0.4 percent in February.
When it comes to the home prices, some analysts take home sales in consideration.
Sales of existing homes remained soft in March, while pending home sales recorded the first gain in the past nine months, according to a report issued April 22 by the National Realtors Association.
New home sales were flat in March. For single-family houses, sales slumped from 449,000 in February to 384,000, according to U.S. Department of Commerce’s latest report, issued April 23. They were 14.5 percent below sales in February and 13.3 percent below March 2013, and the weakest since July.
Some economists who predicted higher figures for February said it was the high price pressure that had prompted a decline in home sales.
Millan Mulraine, an economist at TD Securities LLC, said declining sales of new homes, considered a small segment of the market, would not be strong enough to imply prices were soaring. He predicted that home prices rose 0.3 percent in February.
Still, Mulraine said he saw pending home sales as a good sign that slowing growth did not suggest a sluggish recovery in the housing market.
“Our forecast has more to do with the weather-induced weakness than slowdown in housing activities,” Mulraine said. “We think that the slowdown would be mostly temporary.”
Home price gains started to lose steam in January. Last year 20 cities showed a year-over-year increase of 13.2 percent. But the monthly positive return in 20 cities has risen at 0.8 percent in January, according to data released March 25 by the S&P/Case-Shiller Home Prices Indices. Home prices are not expected to rise at the same rate as last year.
Though Mulraine said he did not expect the same pace of growth pace as in 2013, he expected the year-over-year gain in February to be double-digit.
As price growth has slowed, some economists are pessimistic about an upswing in 2014.
“The acceleration of home prices should slow to about 5 to 6 percent,” Mulraine said.