Home prices continued their rise across the country over the last 12 months, however, monthly data reveal slowing increases and seasonal weakness, according to the latest release of the S&P/Case-Shiller home price index report for January.

The index, which covers all nine U.S. census divisions, recorded a 4.5% annual gain in January 2015 versus a 4.6% increase in December 2014. Denver, Miami and Dallas reported the highest year-over-year gains, as prices increased by 8.4% and 8.3%, respectively, over the last 12 months.

“The combination of low interest rates and strong consumer confidence based on solid job growth,
cheap oil and low inflation continue to support further increases in home prices” David M.
Blitzer, Managing Director and Chairman of the Index Committee for S&P Dow Jones Indices, said in the release.

“Regional patterns in recent months continue: strength in the west and southwest paced by Denver
and Dallas with results ahead of the national index in the California cities, the Pacific Northwest and
Las Vegas. The northeast and Midwest are mostly weaker than the national index,” Blitzer said.

“Despite price gains, the housing market faces some difficulties. Home prices are rising roughly twice
as fast as wages, putting pressure on potential homebuyers and heightening the risk that any uptick in
interest rates could be a major setback,” he said in the release.

“Moreover, the new home sector is weak; residential construction is still below its pre-crisis peak. Any time before 2008 that housing starts were as low as the current rate of one million, the economy was in a recession.

More than 27 years of history for these data series is available, and can be accessed in full by going to
www.homeprice.spdji.com. Additional content on the housing market can also be found on S&P Dow
Jones Indices’ housing blog: www.housingviews.com.

Year-over-year home prices

Both the 10-City and 20-City Composites saw year-over-year increases in January compared to
December. The 10-City Composite gained 4.4% year-over-year, up from 4.3% in December. The 20-
City Composite gained 4.6% year-over-year, compared to a 4.4% increase in December.

Fourteen cities reported higher price increases in the year ended January 2015 over the year ended December 2014. Chicago led the way with a reported increase of 2.5%, up 110 basis points from December. Six cities reported declines, with San Francisco leading the declining annual returns with a reported rate of 7.9%, down from 9.4% annually.

Month-over-month housing prices

The National index declined for the fifth consecutive month in January, reporting a -0.1% change for
the month. Both the 10- and 20-City Composites reported virtually flat month-over-month changes.

Of the nine cities that reported increases, Charlotte, Miami, and San Diego led all cities in January
with increases of 0.7%. San Francisco reported the largest decrease of all 20 cities, with a monthover-month
decrease of -0.9%. Seattle and Washington D.C. reported decreases of -0.5%. Unusually cold and wet weather may have weakened activity in some cities.

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