Home prices rose 1% in August from the seasonally-adjusted July level — the third month in a row of increases, according to S&P/Case Shiller home price index.
The 20-city index was down 11.3% on a year-over-year basis but the drop is only that severe because prices are measured against values in August 2008, before the economic meltdown pushed up unemployment and dragged down home prices. A few months from now we’ll be comparing prices to post-Sept. 15, 2008 prices and the year-over-year change could very well be in positive territory.
But the $8,000 tax credit for first time buyers that is set to expire Nov. 30 has made it difficult to evaluate the seasonally-adjusted gains posted during the summer. Buyers were rushing to take advantage of the program and that drove sales. If the Congress doesn’t vote to extend the credit, sales could drop in coming months.