S&P reported on Tuesday its Case-Shiller Home Price Index, which tracks home prices in 20 U.S. metropolitan areas, rose 2.7 percent y-o-y in March, following an unrevised 3.0 percent y-o-y increase in February. That was the smallest annual advance in house prices since August 2012.

Economists had expected an advance of 2.8 percent y-o-y.

Las Vegas (+8.2 percent y-o-y), Phoenix (+6.1 percent y-o-y) and Tampa (+5.3 percent y-o-y) recorded the highest y-o-y gains in March.

Meanwhile, the S&P/Case-Shiller U.S. National Home Price Index, which measures all nine U.S. census divisions, was up 3.7 percent y-o-y in March, down from 3.9 percent y-o-y in the previous month.

David Blitzer, chairman of the index committee at S&P Dow Jones Indices, noted Given the broader economic picture, housing should be doing better. Mortgage rates are at 4% for a 30-year fixed rate loan, unemployment is close to a 50-year low, low inflation and moderate increases in real incomes would be expected to support a strong housing market. Measures of household debt service do not reveal any problems and consumer sentiment surveys are upbeat. The difficulty facing housing may be too-high price increases. At the currently lower pace of home price increases, prices are rising almost twice as fast as inflation: in the last 12 months, the S&P Corelogic Case-Shiller National Index is up 3.7%, double the 1.9% inflation rate. Measured in real, inflation-adjusted terms, home prices today are rising at a 1.8% annual rate. This compares to a 1.2% real annual price increases in housing since 1975.”