Home-price gains are weakest in 7 years, and that’s a good thing, Case-Shiller says

The numbers: The S&P CoreLogic Case-Shiller 20-city index rose a seasonally adjusted 0.1% in March, compared to February, and was 2.7% higher compared to a year ago. That was the slowest pace of annual growth since August 2012.

What happened: The pace of home-price growth continues to decelerate. That’s good news for the housing market, say most experts: it gives would-be buyers a fighting chance, but still provides some equity appreciation for owners. In the three-month period ending in March, four of Case-Shiller’s 20 cities had higher price increases than in the previous month — hardly a sign of a fizzling national market.

Big picture: Americans still like sunny climates. The cities with the highest price gains in March were Las Vegas, Phoenix and Tampa. Even with the gain, bargains may be found in these metro areas. Prices in Las Vegas and Phoenix are nearly 20% lower than their 2006 peaks, according to Case-Shiller; Tampa’s price index is about 9% lower.

Only one city, New York, was negative during the month, likely due to already high prices but also the effect of tax-law changes that capped the amount of state and local taxes residents can deduct.

Metro area Monthly change 12-Month change
Atlanta 0.7% 4.7%
Boston 1.6% 3.8%
Charlotte 0.8% 4.0%
Chicago 0.6% 1.8%
Cleveland 0.9% 3.5%
Dallas 0.3% 3.0%
Denver 1.0% 4.3%
Detroit 0.4% 3.3%
Las Vegas 0.1% 8.2%
Los Angeles 0.5% 1.3%
Miami 0.6% 4.3%
Minneapolis 1.1% 3.7%
New York -0.1% 2.3%
Phoenix 0.4% 6.1%
Portland 0.7% 2.6%
San Diego 1.2% 1.3%
San Francisco 2.1% 1.4%
Seattle 1.6% 1.6%
Tampa 0.5% 5.3%
Washington 0.9% 2.8%

What they’re saying: “Given the broader economic picture, housing should be doing better,” said David Blitzer, chairman of the index committee at S&P Dow Jones Indices, which compiles and distributes the Case-Shiller index. “Mortgage rates are at 4% for a 30-year fixed-rate loan, unemployment is close to a 50-year low, low inflation and moderate increases in real incomes would be expected to support a strong housing market. Measures of household debt service do not reveal any problems and consumer sentiment surveys are upbeat. The difficulty facing housing may be too-high price increases.”