By Mark
Huffman
ConsumerAffairs.Com
September 1, 2010
For beleaguered homeowners, the month of June held a tiny glimmer
of hope. Home values, which have declined an average of more than 30
percent from their 2006 highs, actually posted a small gain.
S&P/Case-Shiller Home Price Indices, which measure U.S. home prices each month, show that the U.S. National Home Price Index rose 4.4 percent in the second quarter of 2010, after falling 2.8 percent in the first quarter.
Nationally, home prices are 3.6 percent above their year-earlier levels. In June, 17 of the 20 Metropolitan statistical areas (MSAs) covered by S&P/Case-Shiller Home Price Indices and both monthly composites were up; and the two composites and 15 MSAs showed year-over-year gains.
Still, it's not a time to celebrate or take out a home equity loan. Housing prices have rebounded from crisis lows, but other recent housing indicators point to more ominous signals as tax incentives have ended and foreclosures continue to mount.
Next quarter will tell the tale
"While the numbers are upbeat, other more recent data on home sales and mortgages point to fewer gains ahead," said David M. Blitzer, Chairman of the Index Committee at Standard & Poor's. "Even with concerns about near term developments, we recognize that the housing market is in better shape than this time last year. Further, California's cities have moved from some of the hardest hit to three of the four leading cities based on year-over-year gains. Among the other hard hit cities, the news is also a bit encouraging. Las Vegas, however, remains among the weaker cities."
The S&P/Case-Shiller U.S. National Home Price Index, which covers all nine U.S. census divisions, recorded a 3.6 percent improvement in the second quarter of 2010 over the second quarter of 2009. In June, the 10-City and 20-City Composites recorded annual returns of +5.0 percent and +4.2 percent, respectively.
These two indices are reported at a monthly frequency and, after 16 consecutive months of improvement in their annual rates of return, June's figures were the first to moderate from their prior month's pace, pointing to a possible deceleration in home price returns. The 10-City Composite posted a +5.0 percent annual growth rate in June, versus +5.4 percent in May, and the 20-City Composite was up 4.2 percent, versus its +4.6 percent May showing.
"Seventeen of the 20 MSAs and both Composites saw home prices increase in June over May," Blitzer said.The worst not so bad
Bucking the positive trend were Las Vegas, Phoenix and Seattle. Las Vegas has been among the hardest hit housing markets in the country, but in June average prices were off just 0.6 percent. Likewise, Phoenix has been a disaster for the last three years but it managed to hold prices at the same level as a year ago, as did Seattle.
Through the second quarter, 15 of the 20 MSAs and both Composites have positive annual growth rates, and no market is registering a double-digit decline.
"The worry starts when you remember that the Homebuyers' Tax Credit has expired, foreclosures are still at high levels, and July data on home sales and starts were very, very weak," Blitzer 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."
