Data through July 2012, released by S&P Dow Jones Indices for its S&P/Case-Shiller Home Price Indices, showed average home prices increased by 1.5 percent for the 10-City Composite and by 1.6 percent for the 20-City Composite in July versus June 2012. For the third consecutive month, all 20 cities and both Composites recorded positive monthly changes. It would have been a fourth had prices not fallen by 0.6 percent in Detroit back in April.
As of July 2012, average home prices across the United States are back to their summer 2003 levels for the 20-City Composite and to autumn 2003 levels for the 10-City Composite. Measured from their June/July 2006 peaks, the decline for both Composites is approximately 30 percent through July 2012. For both Composites, their July 2012 levels are approximately 7.5-8.0 percent above their recent early 2012 lows.
“Home prices increased again in July,” said David M. Blitzer, chairman of the Index Committee at S&P Dow Jones Indices. “All 20 cities and both Composites were up on the month for the third time in a row. Even better, 16 of the 20 cities and both Composites rose over the last year. Atlanta remains the weakest city but managed to cut the annual loss to just under 10 percent.
The 10- and 20-City Composites posted annual returns of +0.6 percent and +1.2 percent in July 2012, up from their unchanged and +0.6 percent annual rates posted for June 2012. Fifteen of the 20 MSAs and both Composites posted better annual returns in July as compared to June 2012. Dallas and Washington, D.C. saw no change in their annual rates; and Cleveland, Detroit and New York saw their rates worsen in July, with respective returns of +0.4 percent, +6.2 percent and -2.6 percent. After nine consecutive months of double digit annual declines, Atlanta finally improved to a -9.9 percent annual rate in July 2012, but still the worst among the 20 cities followed by S&P Dow Jones Indices.
“Digging into the numbers, 15 cities and both Composites had stronger annual returns in July’s report," said BLitzer. "New York was the only city with a worse 12-month decline in July than June. Dallas and Washington, D.C. saw no change in their annual rates. Cleveland and Detroit saw annual rates decelerate in July versus June, although they remain positive for both cities."
The chart above depicts the annual returns of the 10-City Composite and the 20-City Composite Home Price Indices. In July 2012, the 10- and 20-City Composites posted annual increases of 0.6 percent and 1.2 percent, and were up 1.5 percent and 1.6 percent for the month, respectively.
“The news on home prices in this report confirm recent good news about housing. Single family housing starts are well ahead of last year’s pace, existing home sales are up, the inventory of homes for sale is down and foreclosure activity is slowing. All in all, we are more optimistic about housing. Upbeat trends continue," said Blitzer. "For the third time in a row, all 20 cities and both Composites had monthly gains. Stronger housing numbers are a positive factor for other measures including consumer confidence."
“Among the cities, Miami and Phoenix are both well off their bottoms with positive monthly gains since the end of 2011. Many of the markets we follow have seen some decent recovery from their respective lows–San Francisco up 20.4 percent, Detroit up 19.7 percent, Phoenix up 17 percent and Minneapolis up 16.5 percent, to name the top few. These were some of the markets that were hit the hardest when the housing bubble burst in 2006. The 10-City has increased 7.4 percent and the 20-City 7.8 percent since their recent lows. The positive news in both the monthly and annual rates of change in home prices over the past few months signals a possible recovery in the housing market.”