U.S. Home Prices Increase for the Third Month in a Row

NEW YORK (Reuters) - U.S. single-family home prices in July rose from the previous month, surpassing forecasts and bolstering the case for housing market stability after a three-year plunge, Standard & Poor's said on Tuesday. The S&P/Case-Shiller composite index of 20 metropolitan areas rose 1.6% in July from June, more than triple the estimate of a 0.5% rise found in a Reuters poll. This index rose 1.4% the month before. The 10-city index gained 1.7% in July after a 1.4% rise the previous month (see top chart above, data here).

"These figures continue to support an indication of stabilization in national real estate values, but we do need to be cautious in coming months to assess whether the housing market will weather the expiration of the Federal First-Time Buyer's Tax Credit in November, anticipated higher unemployment rates and a possible increase in foreclosures," David Blitzer, chairman of the index committee at S&P, said in a statement.

The 1.61% July increase in the Composite-20 Index was the largest monthly gain since a 1.62% increase in April of 2005, and the period of three consecutive monthly increases in May, June and July of this year is the first time in more than three years that the index has increased three months in a row (see bottom chart above).

Comments

[Jimmy K:]

Hat tip to news articles for a slow day... Ned something hat tip something

Sep 30 04:21 PM

[Russ Wetherill:]

Home prices went up for five months in a row in 1991 after the last Los Angeles bubble popped. Was that the bottom then? Not quite. Housing prices fell in LA for the next 33 months from September 1991 through June 1994.

Also consider that the 1990s recession had much lower unemployment, mortgage delinquencies, and consumer debt levels. Why then would the current housing downturn not follow a similar, if not more protracted, slump in housing prices?

Fact is that the recession-driven housing price depreciation has yet to begin. High foreclosure rates will continue to weigh on the housing sector for years to come thanks to mortgage rework efforts and banks slow-rolling foreclosures.

Oct 01 03:21 PM