Home Price Declines Show Signs of Slowing

US home prices continued to decline in June, though at a slowing pace. The S&P/Case-Shiller Home Price Indices showed continued broad-based declines in the prices of existing single family homes across the country through June.

The decline in the National Home Price Index – which covers all nine census divisions – remained in double digits, recording a record 15.4% decline in the second quarter of 2008 versus the second quarter of 2007. This is larger than the decline of 14.2% reported in the first quarter of the year. The 10-City and 20-City Composites also set new records, with annual declines of 17.0% and 15.9%, respectively. However, it should be noted that the acceleration in decline was only moderate in June. The May numbers reported annual declines of 16.9% and 15.8%, respectively.

At the national level, the housing market peaked around June/July of 2006. As of June 2008, two years later, the 10-City Composite has fallen by 20.3% and the 20-City Composite is down 18.8%.

 

Record year-over-year declines were reported in both the 10-City and 20-City Composites in June; however, they are very close to the values reported for May. The rate of home price decline may be slowing. For the month, the 10-City Composite was down 0.6% and the 20-City Composite was down 0.5%. While still falling, these are far less than the 2-2.5% monthly drops seen earlier in 2008.

In June, nine of the 20 cities were up month-to-month compared with seven in May. Nevertheless, not one market is showing a positive return over the past 12 months and seven of the metro areas are reporting declines in excess of 20.