By Dees Stribling, Contributing Editor<\/p>\n
The latest S&P\/Case-Shiller Home Price Indices, which were released on Tuesday by S&P Dow Jones Indices, show a sustained slowdown in U.S. home price increases. The National Index gained 6.2 percent in the 12 months ending June 2014, while the 10-city and 20-city composites gained 8.1 percent over the same period; all three indices saw their rates slow considerably from last month. Also, every city saw its year-over-year return slow down.<\/p>\n
Case-Shiller\u2019s national index, now being published monthly, gained 0.9 percent in June compared to May, while the 10- and 20-city composites increased 1 percent for the month. New York led the cities with a return of 1.6 percent, its largest increase since June 2013. Chicago, Detroit and Las Vegas each experienced an increase of 1.4 percent. For Las Vegas, that was the largest monthly gain since last summer.<\/p>\n
\u201cHome price gains continue to ease as they have since last fall,\u201d David M. Blitzer, chairman of the Index Committee at S&P Dow Jones Indices, noted in a statement. \u201cFor the first time since February 2008, all cities showed lower annual rates than the previous month.”<\/p>\n
Negative Equity Drops, But Problems Remain<\/strong><\/p>\n According to the second quarter Zillow Negative Equity Report, the national negative equity rate continued to decline in the second quarter, falling to 17 percent, down 14.4 percentage points from its peak in the first quarter of 2012. Negative equity has fallen for nine consecutive quarters as home values have risen, but even so, more than 8.7 million homeowners with a mortgage still remain underwater, says Zillow. Among all homeowners, a total of 11.9 percent are underwater \u2013 roughly one-third of homeowners do not have a mortgage and own their homes free and clear.<\/p>\n The effective U.S. negative equity rate \u2014 which Zillow says means a loan-to-value ratio of more than 80 percent, making it difficult for a homeowner to afford the down payment on another home \u2014 remains stubbornly high, at 34.8 percent of homeowners with a mortgage. While not all of these homeowners are underwater, they have relatively little equity in their homes, and therefore selling and buying a new home would be a lot harder.<\/p>\n There\u2019s a generational component to the problem of underwater mortgages, according to Zillow. About 18.7 percent of Generation X homeowners (those age from 35 to 49) are underwater on their mortgage, compared to 10.9 percent of Baby Boomers (50 to 64 years old) and 19.6 percent of Millennials. Because it\u2019s very difficult for an underwater homeowner to trade up, Baby Boomers may not be able to find move-up buyers for their homes as Gen X remains stuck, and first-time homebuyers (many of whom are Millennials) will have more difficulty finding affordable starter homes because of high negative equity rates among the homes in the bottom one-third of home values in their market.<\/p>\n Wall Street had another up day on Tuesday, with the Dow Jones Industrial Average up 29.83 points, or 0.17 percent. The S&P 500 \u2013 which ended at a nominal all-time high, at just over 2,000 points \u2013 gained 0.11 percent, and the Nasdaq advanced 0.29 percent.<\/p>\n","protected":false},"excerpt":{"rendered":" The latest S&P\/Case-Shiller Home Price Indices, which were released on Tuesday by S&P Dow Jones Indices, show a sustained slowdown in U.S. home price increase, and the national negative equity rate continued to decline in the second quarter, according to the Zillow Negative Equity Report.<\/p>\n","protected":false},"author":1023,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21825,21742],"tags":[],"class_list":["post-1004102862","post","type-post","status-publish","format-standard","hentry","category-finance","category-latest"],"acf":[],"yoast_head":"\n