Posted on 31 Aug 2010
The Standard & Poor's Case-Shiller 20-city home price index reported today 1 percent rise in June from May, the third consecutive monthly increase. June was the last month that home buyers benefited from a tax credit.
Nationally, the index rose 4.4 percent in the second quarter of 2010, after having fallen 2.8 percent in the first quarter. Home prices in the nationwide index are 3.6 percent above their year-earlier levels in the three-month period.
Despite the improved numbers, David M. Blitzer, chairman of the Index Committee at Standard & Poor's, offered a cautionary note.
“ While the numbers are upbeat, other more recent data on home sales and mortgages point to fewer gains ahead,” Mr. Blitzer said.
“The worry starts when you remember that the home buyers’ tax credit has expired, foreclosures are still at high levels, and July data on home sales and starts were very, very weak,” he said. “The inventory of unsold homes and months’ supply data were particularly troubling. If this relative weakness in demand continues, it will likely filter through to home prices in coming months.”
Still, Mr. Blitzer said, “We recognize that the housing market is in better shape than this time last year.”
Seasonally adjusted, home prices in June increased 0.71 percent in New York City and 0.02 percent in Los Angeles compared with the previous month. They fell 0.6 percent in Las Vegas.
The housing industry has been buffeted with pessimistic reports in the last week. Both the sale of new homes and existing homes fell declined sharply in July, the first month that buyers could not qualify for a tax credit of up to $8,000.
A National Association of Realtors report said sales of existing homes in July fell 25.5 percentfrom the month a year ago to a seasonally adjusted annual sales rate of 3.83 million. That was the lowest rate of sales, which include houses, condos, co-ops and town houses, since 1999.
And the Commerce Department reported that sales of new homes in July fell 12.4 percent from June, to a seasonally adjusted annual rate of 276,000 units. That was the lowest level in July since the government began keeping track in 1963
Analysts surveyed by Thomson Reuters had expected sales to be flat in July from June.
The report also said the median sales price was $204,000 in July, down 6 percent from June and 4.8 percent from July 2009. The average sales price was $235,300 in July, down 3.1 percent from June.
A report on pending home sales is released on Thursday.