US house price growth continues to moderate in February

US house price growth continued to ebb, although at a more moderate pace, the results of a closely followed survey showed.

The S&P CoreLogic Case-Shiller national home price index rose at an annual pace of 2.0% in February, as expected by economists at Bank of America.

That was down from the 3.7% clip observed during the previous month.

A separate index for the 10 largest cities in the US slowed to a year-on-year pace of 0.4%, down from 2.5%, and that for the 20 biggest cities to 0.4% (Dow Jones Newswires: 0.4%) from 2.6%.

In month-on-month terms and after seasonal adjustment, the national index rose by 0.2% while the 10-city and 20-city composite indices were up by 0.1%.

"The results released today pre-date the disruptions in the commercial banking industry which began in early March," said Craig J. Lazzara, managing director at S&P DJI.

"Although forecasts are mixed, so far the Federal Reserve seems focused on its inflation-reduction targets, which suggests that interest rates may remain elevated, at least in the near-term. Mortgage financing and the prospect of economic weakness are therefore likely to remain a headwind for housing prices for at least the next several months."

"We expect annual home price changes to turn negative as a recession and tighter credit conditions weigh on overall economic activity," chipped in Nancy Vanden Houten, lead US economist at Oxford Economics.

"However, we think that a shortage of homes for sale and resilient demand will prevent too steep a decline in home prices."

On the possible impact of tighter credit conditions as a result of the stress in the banking sector, Vanden Houten said that they might weigh on housing activity, but that she expected residential mortgage lending to be less affected than other segments such as commercial real estate.