By David M. Kinchen
Average home prices in the United States increased 2.2 percent in May over April, according to the S&P/Case-Shiller Home Price Indices released Tuesday, July 31, 2012 by S&P Dow Jones.
“With May’s data, we saw a continuing trend of rising home prices for the spring,” said David M. Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices. “On a monthly basis, all 20 cities and both Composites posted positive returns and 17 of those cities saw those rates of change increase compared to what was observed for April. Seventeen of the 20 cities and both Composites also saw improved annual rates of return. We have observed two consecutive months of increasing home prices and overall improvements in monthly and annual returns; however, we need to remember that spring and early summer are seasonally strong buying months so this trend must continue throughout the summer and into the fall.”
“The 10- and 20-City Composites were each up 2.2 percent for the month and recorded respective annual rates of decline of 1 percent and 0.7 percent, compared to May 2011. While still negative, these annual changes are the best we’ve since in at least 18 months,” Blitzer said.
“Phoenix again posted the best annual return,” Blitzer noted. “Average home prices in that region were up 11.5 percent versus May 2011. It was one of the hardest hit cities in the collapse, and prices are still more than 50 percent below their June 2006 peak, but the past five months have been positive for that market. Miami and Tampa are two other Sunbelt cities that were hard-hit in the downturn, but are now showing positive annual rates of change. Boston, Charlotte and Detroit, on the other hand, saw their annual rates of return deteriorate compared to April, even though prices rose over the month of May. Las Vegas posted both a positive monthly change in May and saw an improvement in its annual return; that said, the market is still more than 60 percent below its August 2006 peak.”
“June data for existing home sales, new home sales, housing starts and mortgage default rates were a bit mixed, but all are better than their year-ago levels,” Blitzer said. “The housing market seems to be stabilizing, but we are definitely in a wait-and-see mode for the next few months.”
Source: S&P Dow Jones Indices and Fiserv Data through May 2012