Home prices are showing signs of topping out: The S&P/Case-Shiller index posted its first month-over-month decline in 10 months on Tuesday.
The annual measure of home prices still increased 13.7% in November, but that was only narrowly better than the rise posted in October.
But with mortgage rates climbing steadily since hitting record lows in May, it’s clear the housing recovery is starting to lose some steam.
“While housing will make further contributions to the economy in 2014, the pace of price gains is likely to slow during the year,” said David Blitzer, chairman of the index committee at S&P Dow Jones Indices.
But housing experts say that more modest price increases are probably a good thing for the housing market. The rapid increases of the last year are not sustainable, they said.
“Sellers used to seeing huge price gains month after month may feel some whiplash as that slows down,” said Stan Humphries, chief economist for sales tracker Zillow. But more modest price increases mean “the housing market is still a long way from normal, but it’s getting there.”