Case-Shiller Home Price Indices Rise Slightly in June

| August 31, 2010

The Case-Shiller data for June were reported today, showing an increase of 0.3% in the Composite 20 index. The bounce off of the 2009 low, driven primarily by government stimuli, remains tepid and is likely preparing to reverse.

“Data through June 2010, released today by Standard & Poor’s for its S&P/Case-Shiller Home Price Indices, the leading measure of U.S. home prices, show that the U.S. National Home Price Index rose 4.4% in the second quarter of 2010, after having fallen 2.8% in the first quarter. Nationally, home prices are 3.6% above their year-earlier levels. In June, 17 of the 20 MSAs covered by S&P/Case-Shiller Home Price Indices and both monthly composites were up; and the two composites and 15 MSAs showed year-over-year gains. Housing prices have rebounded from crisis lows, but other recent housing indicators point to more ominous signals as tax incentives have ended and foreclosures continue.”

The following graph from Calculated Risk displays both the Composite 10 and Composite 20 indices since the late 1980s.

The June data point is the last to be influenced by the home buyer tax credit, and July should show a meaningful decline as signaled by the sharp drop in sales and huge increase in supply. The secular decline in home values that began in 2006 will now likely resume before finally bottoming sometime during the next 2 to 3 years.

Category: Commentary, Market Update


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