S&P Case Shiller: Home Prices Improve in June

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Home prices across the United States are stabilizing, according to an industry survey that found price declines moderating at a quicker pace than expected in June.

The S&P Case-Shiller Home Price Index said its survey of 20 metropolitan cities found prices moving upwards for the second consecutive month. Prices in June moved up 1.4%, following a 0.5% uptick in May, with 18 of the 20 metropolitan areas seeing improvement. 

That put the annual decline at -15.4%, in contrast to expectations of a 16.5% figure. The record decline was back in January when the annual drop was -19.2%.

“Home prices are still waging an uphill/upstream/against the wind battle with the still-high number of foreclosure activity,” said Jennifer Lee, economist at BMO Capital Markets. “But all in, this is another piece of positive news giving support to the view that U.S. house prices are stabilizing.”

For the second quarter, home prices are down 14.9% from Q2 2008. That’s a big decline from last year, but in Q1 the annual decline was -19.1%, so the downward trend is moderating rapidly. 

“This is the first time we have seen a positive quarter-over-quarter print in three years,” said David M. Blitzer, chairman of the index committee at Standard & Poor’s.

“As seen in both seasonally adjusted and unadjusted data, as well as the charts, there are hints of an upward turn from a bottom,” Blitzer added. “However, some of the hardest hit cities, especially in the Sun Belt, show continued weakness.” 

Since housing prices peaked three years ago, average home prices have fallen 30.2%. The nation’s worst declines are in Las Vegas and Detroit ― the only two markets that continued to fall in June. Since the peak, average home prices have fallen in those cities by 54.3% and 45.3%, respectively.

“In spite of the recent positive data, the overall numbers remain weak, with all metro areas and the two composites posting negative annual returns, and 15 out of the 20 metro areas reporting double digit annual declines,” the report said. 

Going forward, TD senior strategist Eric Lascelles said “it is still an open question whether home prices will manage to increase in each and every month going forward, but the foundation has at least been laid.”