WASHINGTON -- U.S. home price gains cooled in February from the previous year for the third month in a row, as harsh winter weather and high buying costs have slowed sales.
The Standard & Poor's/Case-Shiller 20-city home price index rose 12.9 percent in February compared with 12 months earlier. While healthy, that is down from a 13.2 percent gain in January.
And home prices fell in 13 of the 20 cities in February compared with the previous month. The index is not adjusted for seasonal variations, so those declines partly reflect weaker sales in the winter.
In addition to bad weather, sales have been held back by a limited supply of available homes, which has forced potential buyers to bid up prices. That's caused prices to increase even as sales have slowed. Sales of existing homes fell to their lowest level in 20 months in March.
With sales slowing, many economists forecast that price gains will keep dropping this year into the mid-single digits.
Higher prices may also be discouraging investors from buying homes, contributing to slower sales. Investors accounted for 17 percent of sales in March, according to the National Association of Realtors, down from 21 percent in February.
"The housing market is showing signs of slowing, but this was expected and is part of a broader return to normal," said Stan Humphries, chief economist at real estate data provider Zillow (Z).
Prices in Las Vegas slipped 0.1 percent in February from the previous month, the city's first monthly decline in nearly two years. And home prices fell 1.6 percent in Cleveland and 0.7 percent in Tampa, Florida. Both monthly drops were the largest for those two cities since January 2012.
Las Vegas still posted the biggest 12-month gain, with an increase of 23.1 percent. But that's down from 24.9 percent in January. Many investors had snapped up homes in Las Vegas after prices plunged in the housing bust, causing sharp price gains.
%VIRTUAL-article-sponsoredlinks%Home sales and construction started recovering about two years ago after being hammered by the housing bust and Great Recession. But a jump in mortgage rates last spring caused sales of existing homes to start falling in the summer.
Sales have now fallen in seven of the past eight months. But the sales decline in March was small and many economists said it showed that existing-home sales had likely bottomed out.
Contracts to buy homes posted a healthy gain last month, the Realtors' group said yesterday. Signed contracts typically result in sales one to two months later, so the increase points to higher sales in the coming months.
New home sales, meanwhile, plunged 14.5 percent in March to the slowest pace in eight months, according to a government report last week. A jump in prices contributed to the decline.
The Case-Shiller index covers roughly half of U.S. homes. The index measures prices compared with those in January 2000 and creates a three-month moving average. The February figures are the latest available.
11 Ways to Protect Yourself From DIY Disasters
Case-Shiller: Home Prices Gain Ground in February
There is a reason this proverb has been around for decades. If you cut your crown molding, tile or paneling too short, you can't go back and make it longer.
Most people can change the insides of a toilet, but problems can still arise, as Prescott discovered. If you have just one bathroom, be prepared to stay overnight elsewhere if something goes wrong. Make sure you turn off the water before you start any plumbing project.
If you know what you're doing, you can change a light fixture. But replacing a light fixture with a ceiling fan involves more than just changing the fixture. Other electrical projects are even more complicated. If you do give it a shot, turn off the breaker before you touch anything.
You can find a YouTube video or detailed instructions for any project. But if that's all the information you have on a project that you've never done before, beware. A video on building a deck from someone in Florida may not tell you what you need to get the deck to withstand 80 inches of snow, and a video from Minnesota on building a deck may not have the instructions you need to ensure your deck can survive a hurricane.
Nearly every week, Home Depot (HD) stores nationwide offer free classes on everything from replacing a faucet to tiling a room. Be mindful that you need to register ahead of time to participate in these workshops.
Most hardware stores, and even some big-box stores, have experts on staff who can answer questions about home projects. If you're replacing specific parts, bring along the parts if you can rather than trying to remember what they look like.
You can rent or borrow some tools if you don't own them yourself. Hint: If you're going to assemble a lot of Ikea furniture, invest $20 in an electric screwdriver.
Some cities are stricter than others about permits, and only licensed contractors can obtain permits for some work. Doing major renovations without a permit could cause problems when you sell your home. Some cities require presale inspections, which can result in fines and the need for retroactive permits. That can mean redoing the job to city specifications.
"If you have to go to YouTube to learn something, you probably don't know what you're doing," Pekel says. Homeowners often "don't know what they don't know." If you mess up a painting project, you can always redo it. But if you take down a load-bearing wall and bring the second floor down with it, you've created a very expensive problem. With DIY projects, being cautious is typically the way to go.
If you earn $100 an hour and replacing a faucet takes you three hours, you would probably save money by hiring a plumber.
That includes both the quality of work and the time your house will be in disarray. Can you install crown molding well enough to be happy with the results? Or will it forever bug you that it's not exactly straight? That goes for more complex projects, too. If you gut the kitchen and end up taking six months to redo it, can you live without a kitchen that long?