Encouraging Report on Home Prices
Another sign that housing may have hit the bottom: On July 28 the S&P/Case-Shiller Home Price Indexes reported that the pace of home price declines slowed for the fourth consecutive month in May. Home prices, while posting the first broad increases in almost three years, still remain about 17% below a year ago.
The new report comes one day after the Commerce Dept. reported that the rate of new home sales jumped an unexpected 11% in June.
"Clear Inflection Point" "The pace of descent in home price values appears to be slowing," David M. Blitzer, chairman of the Index Committee at Standard & Poor's, said in a news release. (Standard & Poor's, like BusinessWeek, is a unit of The McGraw-Hill Companies (MHP).) "There is a clear inflection point in the year-over-year data, due to four consecutive months of improved rates of return, after the steep decline that began in the fall of 2005."
According to the report, annual returns of the 10-city and 20-city home price indexes declined 16.8% and 17.1%, respectively, in May, compared with the same month a year ago. That compares with year-over-year price declines of 18.0% and 18.1%, respectively, reported in April.
All the metro areas in the report remained in negative numbers, with 16 out of the 20 posting double-digit declines. The steepest year-over-year declines were again in Phoenix (–34.2%) and Las Vegas (–32.0%). Prices in Dallas (–4.1%) and Denver (–4.6%) were down the least year-over-year.