Data through July 2013, released today by S&P Dow Jones Indices for its S&P/Case-Shiller Home Price Indices, the leading measure of U.S. home prices, showed increases of 1.9% and 1.8% from June for the 10- and 20-City Composites. For at least four months in a row, all 20 cities showed monthly gains. Phoenix posted 22 consecutive months of positive returns. Although home prices in all the cities increased, 15 cities and both Composites saw these monthly rates decelerate in July versus June.

Over the last 12 months, prices rose 12.3% and 12.4% as measured by the 10- and 20-City Composites. The year-over-year returns show a brighter outlook with 13 cities posting improvement in July versus June values. Las Vegas increased the most from +24.9% in June to an impressive +27.5% in July.

In July 2013, the 10- and 20-City Composites posted annual increases of 12.3% and 12.4%, respectively.Home prices gains are holding their 12% annual rate of gain established by the two Composite indices in April. The Southwest continues to lead the housing recovery. Las Vegas home prices are up 27.5% year-over-year; in California, San Francisco, Los Angeles and San Diego are up 24.8%, 20.8% and 20.4% respectively. However, all remain far below their peak levels.

Since April 2013, all 20 cities are up month to month; however, the monthly rates of price gains have declined. More cities are experiencing slow gains each month than the previous month, suggesting that the rate of increase may have peaked.

Following the increase in mortgage rates beginning last May, applications for mortgages have dropped, suggesting that rising interest rates are affecting housing. The Fed’s announcement last week that QE3 bond buying will continue for the time being may have only a limited, though favorable, impact on housing.

As of July 2013, average home prices across the United States are back to their spring 2004 levels. Measured from their June/July 2006 peaks, the peak-to-current decline for both Composites is approximately 21-22%. The recovery from the March 2012 lows is 20.5% and 21.2% for the 10-City and 20-City Composites.

All 20 cities continued to show positive monthly gains with Chicago leading at +3.2%. Seattle, Tampa and Washington were the only three MSAs where returns increased from June to July. Cleveland showed the most weakness with a +0.5% return in July versus +2.0% in June.

Looking at the annual rates of change, thirteen cities showed acceleration with San Francisco posting its highest year-over-year return of 24.8% since March 2001. Atlanta, Boston, Charlotte, Detroit, Miami, Minneapolis and Phoenix were the seven MSAs with lower annual growth rates; the Twin Cities decreased the most with +9.5% in July compared to +11.5% in June. Although Detroit posted its 25th consecutive positive year-over-year return, it remains the only city below its January 2000 level.