The Case-Shiller Home Price Index (HPI) slipped 0.5% in December on a seasonally adjusted basis. The level of the index is the lowest since January 2003 (see Chart 2). Of the 20 metro areas, Phoenix (+1.5%), Miami (+0.2%), Tampa (+0.2%), Dallas (+0.2%), Portland (+0.1%), Denver (+0.1%), and Charlotte (+0.1%) recorded increases of varying sizes in December. Among the other metro areas that showed decreases in home prices, the largest declines were in Detroit (-3.5%), Atlanta (-1.3%) and Chicago (-1.1%), while San Francisco was the only metro area to show a nearly steady reading.

On a comparative basis, the message from the National Association of Realtors, CoreLogic, Case-Shiller, and FHFA home price index is that declines in home prices have not stopped and the magnitude is not significantly smaller than a year ago for three of the four house price measures (see Chart 3). Thus, the pricing situation in the housing sector continues to remain problematic.

Asha Bangalore — Senior Vice President and Economist

http://www.northerntrust.com

Asha Bangalore is Vice President and Economist at The Northern Trust Company, Chicago. Prior to joining the bank in 1994, she was Consultant to savings and loan institutions and commercial banks at Financial & Economic Strategies Corporation, Chicago.

The opinions expressed herein are those of the author and do not necessarily represent the views of The Northern Trust Company. The Northern Trust Company does not warrant the accuracy or completeness of information contained herein, such information is subject to change and is not intended to influence your investment decisions.

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