- US home prices in July rose for the 3rd straight month, surpassing forecasts and suggesting that the housing market is stabilizing after a 3 year plunge.
- Home prices in 20 metropolitan areas rose 1.6% in July from June, more than triple the estimate of a 0.5% rise found in Reuters poll.
- Index rose 1.4% the month before.
- 10-city index gained 1.7% in July after a 1.4% rise in the previous month.
"The upshot is that the housing market is starting to clear ever so slightly, that sustains hope that housing will get to a stable place which is good news for consumer balance sheets and, ultimately, for the economy,"" said Pierre Ellis, senior economist at Decision Economics.
- A record stockpile of foreclosed homes have been exerting pressure on home prices overall, but recent home sales reports show an easing up of the massive unsold inventory.
- A first time buyer credit of $8,000, which ends in November 30, has jump-started housing activity this year but there are concerns about the impact when the incentives disappears.
"These figures continue to support an indication of stabilization in national real estate values, but we do need to be cautious in coming months to assess whether the housing market will weather the expiration of the Federal First-Time Buyer's Tax Credit in November, anticipated higher unemployment rates and a possible increase in foreclosures," - David Blitzer, chairman of the index committee at S&P, said in a statement.
- The monthly price increases helped the annual rates, with the yearly pace of declines in home prices slowing to a 12.8% drop in the 10-city index and 13.3% downturn in the 20-city index.
- All 20 metro areas showed an improvement in the annual rate of decline in July compared with June. On a monthly basis, only Seattle and Las Vegas showed declines.
- Prices have plummeted 33.5 percent for the 10-city index and 32.6 percent for the 20-city index from the peak in the second quarter of 2006.
Source: Reuters, Federal Reserve Bank of Cleveland, Barron's
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