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Case-Shiller index: U.S. home prices flat in February

Home prices cooled as severe winter weather, increasing mortgage rates and tightening supply affected sales.

By Ananth Baliga
Case-Shiller index: U.S. home prices flat in February
Increasing mortgage rates, severe winter weather and lower supply resulted in below-par rise in home prices. UPI/Roger L. Wollenberg | License Photo

NEW YORK, April 29 (UPI) -- Home prices in 20 cities across the U.S. continued to rise at a slower rate for the year ending February as the housing market shows signs of cooling.

The Standard & Poor's Case-Shiller index of property values increased 12.9 percent from February 2013, the smallest 12-month gain, after registering a 13.2 percent growth in January. The index found that only five cities had appreciating annual rates of price, where as 13 cities posted lower annual rates of growth.

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“The days of very robust home-price gains are over,” said Thomas Costerg, a New York-based economist at Standard Chartered. “Elevated price gains are a headwind, especially for first-time buyers. Prices will slow going forward, and the housing market needs that to recalibrate supply and demand.”

Rising mortgage rates and severe winter weather have been affecting demand for the few months of the year. Analysts hope rising wages and increasing consumer demand will help home sales regain lost momentum.

The West continued to show strong price appreciation of any region. Denver and Houston were the only cities to have prices anywhere close post-crisis highs, while the Northeast continues to show some of the smallest year-over-year gains.

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Case-Shiller is the latest indicator to show that the housing market has cooled down from the strong price rise it showed in late 2012 and 2013. Added to that higher mortgage rates and a still tight lending market has made it difficult for residential homebuyers.

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