Home Prices Show Slight Growth In July

Home values in major U.S. metropolitan areas rose slightly in July over June, but are still down 4.1 percent from July 2010.

But prices reflected in S&P Case-Shiller Home Price Indices were up 0.9 percent in July for the fourth consecutive month.

On a year-over-year basis, only Detroit and Washington, DC posted increases, though the two markets rose for markedly different reasons. Detroit, one of the hardest hit metropolitan areas, had nowhere to go but up. Washington DC, which enjoys a strong federal-based economy, has felt the housing recession only slightly.

It's the monthly figures that may get the most attention from economists. Seventeen of the 20 Metropolitan Statistical Areas (MSA) and both the 10 and 20-city Composites posted positive monthly increases; Las Vegas and Phoenix were down over the month and Denver was unchanged.

On an annual basis, Detroit was up a solid 1.2 percent over July 2010 while the nation's capital rose 0.3 percent.

Broad improvement

“With July’s data we are seeing not only anticipated monthly increases, but some fairly broad improvement in the annual rates of change in home prices,” said David M. Blitzer, Chairman of the Index Committee at S&P Indices. “This is still a seasonal period of stronger demand for houses, so monthly price increases are expected and were seen in 17 of the 20 cities. The better news is that 14 of 20 cities and both Composites saw their annual rates of change improve in July.

Though the market is far from a sustained recovery, Blitzer said the four straight months of price increases is encouraging.

“Continued increases in home prices through the end of the year and better annual results must materialize before we can confirm a housing market recovery,” Blitzer said.

And that may not happen for a while. Blitzer said if you look at the state of the overall economy and, in particular, the recent large decline in consumer confidence, this latest report continues to indicate that the housing market is still bottoming and has not turned around.

New home sales sink

The S&P price report comes on the heels of more discouraging housing news. The U.S. Commerce Department reports sales of new homes fell 2.3 percent from July to August and is on track for the lowest total since records have been kept.

The median price of a new home was down 7.7 percent from July 2010, to $209,100. The Commerce Department says there is currently a six month supply of new homes on the market.