The April 2010 S&P/Case Shiller Home Price Index of 20 cities rose 3.8 percent, slightly above expectations of a gain of 3.4 percent. The gain in the non seasonally adjusted index was the first since September 2009. However, it captures the last month of the federal homebuyer tax credit.
Seasonally adjusted, the month-over-month gain follows a drop in February and March. Eighteen cities posted month-to-month increases in April, but price levels remain close to April 2009 lows. Miami and New York were the only two cities to post monthly drops, dropping 0.8 percent and 0.3 percent, respectively. New York posted a new relative index low. San Diego has now shown 12 consecutive months of positive returns. It is the only market that did not contract in the late winter months.
On a year-over-year basis, of the 20 cities surveyed, 11 had gains, led by San Francisco and San Diego. Las Vegas again led the declines, followed by Detroit. Phoenix saw a year-over-year gain of 5.4 percent, while Miami fell by .5 percent.
With the expiration of the homebuyer tax credit and no further government stimulus on the horizon, the housing industry will be left to its own natural supply/demand dynamic. How the housing market reacts will have much to say about the overall economic conditions, including consumer spending and even the status of banks, which have likely priced in a housing recovery in the mortgage-backed securities still on their books.
For more on the Home Price Index, please click on the “Housing Statistics” page either on the menu bar on in the list in the left-side column.
Gregg D. Killoren
victoria1014
