Case-Shiller Home Prices:  Tax Impact Continues To Stymie Gains

Bottom Line: Home prices rose slightly nationwide in February as most California markets saw lower prices again. Higher tax regions across the country are seeing slower or even modest price declines as buyers adjust to federal tax treatment of local property and mortgage interest. Cities in lower tax states saw gains with Tampa rising the most on the moth and Dallas seeing solid gains. On a year-on-year basis all the major survey areas were still higher with Vegas and Phoenix leading the gains. Overall the trend is towards steadily slower rates of home price appreciation as those major markets in higher tax states dominate the national averages. Case Shiller 20-City Home Price Index ROSE by 0.2% (seasonally adjusted) in February to 214.9, compared with market expectations for an increase of 0.2%. Home prices are 2.9% ABOVE their year ago level. Nationwide home prices are now just 4.0% ABOVE their April 2006 peak, near late 2005 levels and 57.1% ABOVE their January 2012 trough.

• On a non-seasonally adjusted basis, the home price index ROSE by 0.2% on the month.
• Housing prices rose in 17 of the 20 metro areas in February (on a seasonally adjusted basis) and in 20 of 20 metro areas on a year-over-year basis.
• San Diego had the smallest year-over-year increase at 1.8% while Las Vegas had the largest year-over-year increase at 11.0%.