Data through May 2010, released by Standard & Poor’s for its S&P/Case-Shiller Home Price Indices, a measure of U.S. home prices, show that the annual growth rates in 15 of the 20 MSAs and the 10- and 20-City Composites improved in May compared to those reported for April 2010. The 10-City Composite is up 5.4 percent and the 20-City Composite is up 4.6 percent from where they were in May 2009. While 19 MSAs and both Composites reported positive monthly changes in May over April, only 12 of the MSAs and the two Composites saw better month-over-month growth rates in May than those reported in April.
The chart above depicts the annual returns of the 10-City and 20-City Composite Home Price Indices with increases of 5.4 percent and 4.6 percent, respectively, in May 2010 compared to the same month last year. While still positive, Boston, Charlotte, Cleveland, Dallas and Denver reported weaker annual growth rates compared to their reports from last month. Seven of the 20 MSAs are still reporting negative annual growth rates with May’s data.
“While May’s report on its own looks somewhat positive, a broader look at home price levels over the past year still do not indicate that the housing market is in any form of sustained recovery,” said David M. Blitzer, chairman of the Index Committee at Standard & Poor’s. “Since reaching its recent trough in April 2009, the housing market has really only stabilized at this lower level. The two Composites have improved between five and six percent since then, but this is no better than the improvement they had registered as of October 2009. The last seven months have basically been flat. The May 2010 data for 15 of the 20 MSAs and the two Composites show an improvement in annual returns compared to April’s report. With the month-over-month data, while 19 of the 20 MSAs and the two Composites were positive, we are in a strong seasonal period for home prices, so that was largely expected. In addition, there may still be some residual impact from the homebuyers’ tax credit, since they affect any purchase that closes through June 30th 2010. We need to watch where the housing markets will go after these temporary stimuli go away. June’s existing and new home sales and housing starts data do not show much real improvement in those statistics either. It still looks possible that the housing market might bounce along the bottom for the foreseeable future, before showing any real improvement that will filter through to the rest of the economy.”
The chart above shows the index levels for the 10-City and 20-City Composite Indices. As of May 2010, average home prices across the United States are back to the levels where they were in the autumn of 2003. Measured from June/July 2006 through May 2010, the peak-to date figures for the 10-City Composite and 20-City Composite are -29.6 percent and -29.1 percent, respectively.
In May, Las Vegas posted a new index low as measured by the current housing cycle, where it peaked in August 2006. The peak-to-trough figure is -56.4 percent, with that market generally returning any gains it had posted since 2000. Detroit is the only market that is worse off. Its index is at levels last seen in late 1994, indicating that any appreciation in value during the past 15 years is now gone.
Nineteen of the 20 MSAs and both Composites showed month-over-month increases in May. The 10- and 20-City Composites were up 1.2 percent and 1.3 percent, respectively. San Diego continues to improve, with its 13th consecutive positive monthly increase. Miami and New York, the two markets that had declined in April, posted positive monthly changes in May 2010, increasing 0.9 percent and 0.8 percent, respectively. Las Vegas, on the other hand, showed a drop in index level by 0.5 percent in May as compared to April 2010.
The table below summarizes the results for May 2010. The S&P/Case-Shiller Home Price Indices are revised for the 24 prior months, based on the receipt of additional source data. More than 23 years of history for these data series is available, and can be accessed in full by going to www.homeprice.standardandpoors.com.
Since its launch in early 2006, the S&P/Case-Shiller Home Price Indices have published, and the markets have followed and reported on, the non-seasonally adjusted data set used in the headline indices. For analytical purposes, Standard & Poor’s does publish a seasonally adjusted data set covered in the headline indices, as well as for the 17 of 20 markets with tiered price indices and the five condo markets that are tracked. A summary of the monthly changes using the seasonally adjusted (SA) and non-seasonally adjusted (NSA) data can be found in the table below.
For more information, visit www.standardandpoors.com/indices.