The S&P/Case-Shiller Home Price Indices Show an Erosion in Annual Gains

The S&P/Case-Shiller Home Price Indices Show an Erosion in Annual Gains

"New York, October 31, 2006 – Data released today by Standard & Poor’s for its S&P/Case-Shiller® Home Price Indices, the leading measure of U.S. home prices in the United States, shows visible signs of a decline in annual gains.

The erosion in annual home price changes can be clearly seen in the chart above. 2006 annual gains mirror levels not seen since 1997, considerably lower growth than much of the decade between. August 2006 is up only 5.2% from a year ago, compared to 15.8% in 2005 and 20.4% in 2004.

“Home price gains definitely appear to be wearing away.” says Robert J. Shiller, Chief Economist at MacroMarkets LLC. “For two years running the S&P/Case-Shiller Home Price Composite Index has steadily shown tapering annual returns from its peak in July 2004. Not only do we continue to see shrinking gains but actual declines in most cities.”

San Diego has joined Boston in showing a decline in home prices, down 0.5% from a year ago; while Boston maintains a deflationary rate in excess of 2%. Month-over-month returns continue to show lackluster performance with all metro areas showing either falling or flattening price changes."