Data through May 2010, released today by Standard & Poor’s for its S&P/Case-Shiller Home Price Indices, show that the annual growth rates in 15 of the 20 metropolitan statistical areas (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.
It seems the federal homebuyer tax credit, which expired at the end of April, but allowed closings to continue through June (that deadline was extended by Congress to the end of September due to the lengthy process of getting to closing these days), boosted prices. However, what happens to prices in the absence of the tax credit, given big slips in mortgage applications and housing starts, may not be pretty. So, the May numbers cannot be read as stabilization in the housing market, though on their face, that would appear to be the case.
David M. Blitzer, Chairman of the Index Committee at Standard & Poor’s, stated in the report, “We need to watch where the housing markets will go after these temporary stimuli [the tax credit and the general strength of buying in Spring] 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.”
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.
Month-to-month gainers were headlined by Minneapolis, which rose 2.8 percent, and Atlanta, up 2 percent. All markets except Las Vegas, which declined 0.5 percent, were positive.
On a year-over-year basis, Las Vegas was the biggest decliner at 6.5 percent, and the biggest gainer was San Francisco at 18.3 percent.
San Diego continued 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.
For more information on the S&P/Case-Shiller Home Price Index, please click on the “Housing Statistics” page on the menu bar above or in the Pages list in the left-side column.
Gregg D. Killoren
victoria1014
