FORTUNE -- The housing market hasn't been chilled by winter weather, according to data released Tuesday from the S&P/Case-Shiller Home Price index.
Home prices rose 11.3% nationally in December 2013 from a year earlier, matching the index's "best year since 2005," according to David Blitzer, chairman of the Index Committee at S&P Dow Jones indices.
But keep in mind that because the Case-Shiller index lags by two months, the index isn't measuring the same time period as recent data like housing starts, builder confidence, and mortgage applications, all of which suggest the housing recovery may be slowing.
Furthermore, Tuesday's data shows that while year-over-year price increases remain significant, the month-to-month increases show that the rise in home prices is slowing. According to Blitzer, "the strongest part of the recovery in home values may be over."
The other thing to keep in mind is that home price appreciation has lately been driven more by a lack of supply than a surge in demand. Bill McBride of Calculated Risk has been closely tracking the issue, and he writes:
There are several reasons inventory has been low: a) Most of the recent investor buying has been "buy-to-rent" and these investors aren't selling ... b) [It is] difficult for people who are underwater (negative equity) to sell, c) Seller psychology: When the expectation is that prices will fall further, marginal sellers will try to sell their homes immediately. And marginal buyers will decide to wait for a lower price. This leads to more inventory on the market. But when the expectation is that prices are stabilizing (the current situation), sellers will wait until it is convenient to sell. d) Low inventory can keep some potential sellers from listing their homes because they can't find a move-up home to buy.
By this logic, one should assume that this lack of demand will correct itself. Higher prices should draw more people out of "underwater" status, and slowing home price appreciation will convince the marginal home seller to get his home on the market before the party is over. This suggests that while home prices might rise more slowly than they did in 2013, we can expect a healthier and more balanced real estate market going forward.
Re/Max CEO Margaret Kelly talks about the decision to go ahead with their IPO on day two of the federal government shutdown.
FORTUNE -- Wall Street may be getting jittery as Congress struggles to resolve the nation's budget problems, but investors betting on America's housing market don't seem fazed by Washington's dysfunction.
On the second day of the government shutdown, real estate brokerage Re/Max Holdings (RMAX) made its debut on the New York MORENin-Hai Tseng, Writer - Oct 3, 2013 9:56 AM ET
The U.S. has more than 2 million missing households, thanks largely to 18 to 34-year-olds stuck living with the parentals.
FORTUNE – Until recently, hedge funds and private equity firms drove the U.S. housing market's recovery, buying a shrinking pool of foreclosed and distressed homes to rent. It seemed like a lucrative investment, given that rents were rising while homeownership fell to record lows.
But as big investors turn into landlords, it's MORENin-Hai Tseng, Writer - Jul 26, 2013 5:00 AM ET
Cities in California and Texas are already seeing the early signs of a housing bubble.
FORTUNE – Only a year after the U.S. housing market hit bottom, it may be bubbling up -- again. Odd as it may seem, some economists warn the steady rise in home prices, at least in some markets, are inflated and could eventually pop.
Prices nationwide rose nearly 6% last year -- more than most ever expected. MORENin-Hai Tseng, Writer - May 17, 2013 10:15 AM ET
Fewer Americans have a stake in the stock market, and unemployment may be preventing more from investing in equities.
FORTUNE – As U.S. stocks soar to new highs, economists argue the rally makes people feel richer. And when they think they're wealthier, the theory is that they'll spend more on everything from homes to cars and clothing.
The problem with that idea is fewer and fewer Americans actually have any stake in MORENin-Hai Tseng, Writer - May 15, 2013 11:36 AM ET
More good news for the housing market.
By Joshua Steiner, Hedgeye
FORTUNE -- The chart above shows the ratio of new home sales to total sales historically back to 1999. Currently, new home sales are running at 7.8% of total sales. From 1999 to 2005, new home sales averaged a fairly consistent 16% of total sales. The low watermark was 5.5% in May 2010.
The trend in new home sales as a MOREApr 25, 2013 12:47 PM ET
Signs that the big money has retreated from the foreclosure boom may be good for the housing market overall.
FORTUNE – When the U.S. housing market crashed in 2007, millions lost their homes to foreclosure. With their finances in shambles, they picked up the pieces by renting rather than buying. Big institutional investors quickly caught on, snapping up foreclosed properties on the cheap and renting them out.
All this has helped drive MORENin-Hai Tseng, Writer - Apr 5, 2013 5:00 AM ET
Borrowing is still relatively cheap, so more potential homeowners may dive into the market.
FORTUNE – Mortgage interest rates have been rising on signs that the U.S. economy is improving. Last week, the 30-year fixed rate reached the highest level in more than six months, climbing to an average of 3.63%, compared with 3.52% the previous week and 3.92% a year earlier. The current rate is the highest it's been since MORENin-Hai Tseng, Writer - Mar 18, 2013 10:57 AM ET
Housing construction is soaring, but much of it is still going to renters.
FORTUNE – For all the good news we've heard about the U.S. housing market, some things still haven't changed. Builders are breaking ground on more new homes than we've seen in years, but buyers aren't exactly clamoring for them.
For the past year, housing starts have risen by 37%. However, home sales haven't kept up, rising only 9% during MORENin-Hai Tseng, Writer - Feb 12, 2013 10:49 AM ET
Despite the recent positive signs in the housing market, one key group has not yet returned.
FORTUNE -- In another sign that the U.S. housing market is recovering, the closely watched S&P/Case-Shiller index report on Tuesday noted home prices over the summer posted its biggest percentage gain in more than two years. This is good news, but a crucial segment is missing out on better days: First-time homebuyers.
In October, the share of MORENin-Hai Tseng, Writer - Nov 27, 2012 10:59 AM ET
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