Home Prices Rise 2.2% Showing Stability Ahead, Case-Shiller Says

National home prices rose 2.2% in May, signaling a slow increase and movement away from the housing bottom, according to the latest home data released Tuesday by the S&P/Case-Shiller home prices indices. 

The 2.2% increase in prices in May over April were seen in all 20 of the metropolitan statistical areas (MSAs) Case-Shiller tracks, despite three MSAs—Boston, Charlotte and Detroit—seeing a downturn in annual returns. While still negative, the annual changes are the best seen in at least 18 months, Case-Shiller says. 

“With May’s data, we saw a continuing trend of rising home prices for the spring,” says 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.”


The indication requires some caution, however, because of seasonal trends, he said. 


“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. 

Regionally, Phoenix saw the best annual return, but prices are still down more than 50% from their June 2006 peak. Miami and Tampa, likewise, are seeing positive annual rates of change. 

The data along with other indicators shows signs of stability, Blitzer said. 

“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. The housing market seems to be stabilizing, but we are definitely in a wait-and-see mode for the next few months.”

Written by Elizabeth Ecker

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  • There is cause and effect and symptoms and disease.  This report seems to be more focused on effect and symptoms than cause and the underlying disease.

    Five years ago, no one would say the sales prices were doing better in the peak season for home sales when sales prices were less than those in the prior year.  Perhaps the drops are not what they were a few months ago but with a down market it seems RE Home Network is on point.

    BUT the real problems still lie in three areas:  1) little government support for a better home market, 2) stringent mortgage underwriting standards, and 3) a huge shadow inventory.  It does not seem that much will be known about government action if any until after the Presidential inauguration in January 2013 if then.

    July 31 is near the end of the home selling season.  There are just 47 days left until the end of the spring and summer selling season for 2012.  What difference will slightly positive or slightly negative home values make in the direction of HECM originations?  Except for  industry cheerleaders, no one is predicting endorsement volume in excess of 60,000 for this fiscal year.

    Does anyone really believe sales between mid September 2012 and early May 2013 will change the direction of home values much at all?  Before we begin talking about better days for the industry as a whole, we need better home values.  Yes, the bottom is coming but what will that number be and when will we see it?

    While we should ignore pessimists like those who said we would have less than 36,000 endorsements this fiscal year, we need to question and challenge the Pollyannas and cheerleaders in our industry who declare we will have 100,000 endorsements in fiscal or calendar 2013.  Some of the cheerleaders remind me of those cheerleaders who get the crowd to yell “Touchdown, touchdown, we want a touchdown” as the opposing team has just intercepted a pass and is converting it into a 99 yard run back touchdown of their own.  Silly, absolutely but so are our industry cheerleaders.    

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