Home prices up in most major U.S. cities
The Standard & Poor’s/Case-Shiller home price index, which tracks housing prices in 20 major U.S. cities, showed a slight uptick in 12 them for March. It is the first such increase in seven months.
The S.&P./Case-Shiller index, as the index is usually called, uses methods developed by economics professors from Yale and Wellesley College to gather and analyze sales data for single-family dwellings. It compares its data with prices from January of 2000 and averages the numbers over a quarter. It publishes its report on the final Tuesday of each month, with a lag-time of two-months.
Index drops slow
Though prices were up in 12 of the 20 cities, the overall index was weighted down by the cities on the weak end of the scale. The index fell by 2.6 percent year-over-year in March, compared to 3.5 percent seen in February. At that, it is the smallest year-over-year drop seen since the final month of 2010.
The largest month-over-month increases were seen in Dallas, Phoenix and Seattle. But perhaps the most gratifying news, prices rose in Tampa and Miami, which were two of the major markets hit the hardest when the housing bubble popped. The worst market in the nation, Las Vegas, remained level.
However, priced fell dramatically in Detroit, Chicago and Atlanta.
Slow market recovery
Viewed with increasing numbers of home sales and record-low mortgage rates, the optimistic index is yet another hopeful sign of a continuing, if snail-like, recovery in the housing market.
David Blitzer, chairman of the index committee at Standard & Poor’s, said:
“This is relatively good news. We just need to see it happen in more of the cities and for many months in a row.”
Some analysts are urging caution, however. The month-to-month data, unadjusted for the season, may, to some degree, reflect the beginning of the spring, which traditionally shows a market uptick.
Other market reports have also indicated gains. The S.&P./Case-Shiller index, however, averages its data over three months, and so may be later to reflect a change than other indicators.
Jonathan Basile, of Credit Suisse said:
“It might be the last of the closely followed home price figures to reflect a turning point.”
Partly fueled by job increases
An improving job market is also partially behind the uptick. Statistics saw that 160,000 jobs were added to the economy in May, and that more than a million have been added in the past five months. Unemployment figures have fallen a full point since last August.