Home Prices Up – for now
According to the S&P/Case-Shiller Home Price Index, national home prices jumped 3.6% in the past year. Prices also climbed 4.4% in the second quarter compared with a 2.8% plunge in the first quarter. “While the numbers are upbeat, other more recent data on home sales and mortgages point to fewer gains ahead,” said David M. Blitzer, chairman of the Index Committee at Standard & Poor’s. Home prices across the country could be substantially lower a year from now, according to Pat Newport, an analyst with IHS Global Insight. “It’s now apparent that the demand for housing is a lot weaker than anyone thought,” he said. That has resulted in a glut of inventory, which a slew of bank repossessions of foreclosed properties is only making worse.
Plus job gains are still proving elusive. “These three factors are enough to bring home prices down,” Newport said. A market basket of 20 metro areas tracked by the S&P/Case-Shiller home price indexes showed that prices gained in all markets but one. The index is up 4.2% year-over-year, well above a 3.1% forecast from industry experts as compiled by Briefing.com. The month-over-month gain was 1%. “Las Vegas was the only city to record a fall in prices during June (-0.6%), compared with a month earlier. All 19 other markets were either up or flat, with Chicago, Detroit and Minneapolis the biggest winners. Each gained 2.5%. Fifteen of the 20 cities recorded 12-month price rises, with San Francisco leading the way. Its 14.3% increase was one of three cities posting double-digit gains, with San Diego prices jumping 11.2% and Minneapolis 10.7%. Las Vegas had the biggest 12-month loss, down 5.2%.
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