Mar
02

Index: Chicago Home Prices Up, but Growth Slowing

March 02, 2014
January home sales

Potential homebuyers check out a two-story family room in a property for sale. (Spencer Platt / Getty Images / November 21, 2010)

U.S. home prices ended 2013 with slowing growth, suggesting a leveling out of prices that may keep more properties within reach of potential buyers.

The S&P/Case-Shiller index of property values in 20 cities rose 13.4 percent from December 2012 after increasing 13.7 percent in the year ended in Novembe according to the S&P/Case-Shiller home price index. It was the first deceleration since June.

In Chicago, fourth-quarter home prices fell 0.5 percent from the third quarter, but the city improved  considerably from its decline of 1.2 percent the previous month month.

Still, December 2013 prices were 11.3 percent higher than prices a year ago in Chicago, according to the index.

Price appreciation is slowing as rising mortgage rates combined with harsh winter weather to cool home purchases over the past few months. Smaller increases mean more homes will remain affordable as the labor market improves, helping maintain the rebound in residential real estate that has boosted growth.

“The housing recovery continues, but perhaps not as vigorously as it did in the first half of last year,” said Michael Feroli, chief U.S. economist at JPMorgan Chase & Co. and the best forecaster of the home-price index during the past two years, according to Bloomberg calculations. “Even so, appreciation trends still look pretty good even though they may not be as strong as they were.”

This post originally appeared on ChicagoTribune.com on Feb. 25, 2014.

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