WASHINGTON (AP) — U.S. home prices fell for the second straight month in December as brutally cold weather, tight supply and higher costs slowed sales.
The Standard & Poor's/Case-Shiller 20-city home price index declined 0.1 percent from November to December, matching the previous month's decline. The index is not adjusted for seasonal variations, so the dip partly reflects slower buying as winter weather set in.
For all of 2013, however, prices rose by a healthy 13.4 percent, mostly because of big gains earlier in the year. That was the largest calendar year gain in eight years. But the year-over-year gain slowed from November's 13.7 percent pace. That's only the second time that year-over-year increases have declined since prices began recovering two years ago.
The figures come after other reports show that home sales and construction have slowed after strong gains last year. Most economists expect the housing recovery will continue this year, though likely at a slower pace.
"The market should continue its slow march back to normal, as annual (price) appreciation rates fall to more sustainable levels around 3 percent," said Stan Humphries, chief economist at real estate data provider Zillow.
The Case-Shiller index covers roughly half of U.S. homes. The index measures prices compared with those in January 2000 and creates a three-month moving average. The December figures are the latest available.
"Gains are slowing ... and the strongest part of the recovery in home values may be over," said David Blitzer, chairman of the S&P's index committee. "Higher home prices and mortgage rates are taking a toll on affordability."