Indeks
Home prices in the U.S. fell at a slower pace in the second quarter, signaling the worst housing slump in more than 25 years may be starting to stabilize, a private survey showed today.
Home values declined 0.5 percent in the three months through June from the previous three months, compared with a 0.9 percent drop in the first quarter. Compared with a year earlier, values dropped 15.4 percent, the most since record keeping started 20 years ago.
The housing slump, currently in its third year, is declining at a slower pace as the drop in property values has made homes more affordable. Even so, prices probably will continue to fall for the rest of the year as sellers try to unload properties that have sat on the market for a record number of months.
``We're probably getting close to the trough, but I wouldn't rule out deeper declines,'' Sal Guatieri, a senior economist at BMO Capital Markets in Toronto, said before the report. ``Towards the end of the year we may see,'' the rate of price decline slow.
Home prices in 20 U.S. metropolitan areas fell 15.9 percent in the 12 months ended June, less than forecast and the most since records began in 2001, following a 15.8 percent drop in May.
Economists forecast the 20-city index would fall 16.2 percent from a year earlier, according to the median of 26 forecasts in a Bloomberg News survey. Estimates ranged from declines of 17.3 percent to 15.9 percent.
Year-Over-Year
Compared with a year earlier, all 20 areas showed a decrease in prices in June, led by a 29 percent drop in Las Vegas and a 28 percent decline in Miami.
On a month-over-month basis, nine cities showed an increase in property values, up from seven in May.
``While there is no national turnaround in residential real estate prices, it is possible that we are a seeing some regions struggling to come back, which has resulted in some moderation of price declines at the national level,'' David Blitzer, chairman of the index committee at S&P, said in a statement.
Robert Shiller, chief economist at MacroMarkets LLC and a professor at Yale University, and Karl Case, an economics professor at Wellesley College, created the home-price index based on research from the 1980s.
Other reports show price declines continue. The National Association of Realtors said yesterday that the median price of an existing home fell 7.1 percent in July from a year earlier, compared with a 6.1 percent drop in June.
Resales Rise
The Realtors group also said that resales increased from a 10-year low and the supply of unsold homes rose. There was a record 4.67 million unsold houses and condos on the market in July, representing 11.2 months' supply at the current sales pace, matching the highest rate ever.
The Commerce Department is scheduled to release its report on July new home sales later today. The figures will include information on prices and inventory.
The price gauges from Commerce and the Realtors group can be influenced by changes in the regional composition or types of homes sold. Purchases in areas with more expensive homes relative to cheaper properties will bias the figures up.
In contrast, the S&P/Case-Shiller index, and another by the Office of Federal Housing Enterprise Oversight, track the same houses over time and more accurately reflect price trends, economists said. The Ofheo figures are due at 10:00 a.m.
Bargain Hunting
Some companies are already seeing a pickup in interest because of lower prices.
``Buyers are coming back into the market,'' Tom McCormick, president of Astoria Homes, said in a Bloomberg Television interview last week. ``Remarkably low'' prices do ``seem to be bringing people in off the sidelines.''
Even so, tight credit conditions and ongoing declines in residential construction will weigh on economic growth in coming months, Federal Reserve policy makers said at their Aug. 5 meeting. The Fed's quarterly survey of bank loan officers showed 75 percent had made it tougher for prime borrowers to get a mortgage, more than in the April survey.
Home values declined 0.5 percent in the three months through June from the previous three months, compared with a 0.9 percent drop in the first quarter. Compared with a year earlier, values dropped 15.4 percent, the most since record keeping started 20 years ago.
The housing slump, currently in its third year, is declining at a slower pace as the drop in property values has made homes more affordable. Even so, prices probably will continue to fall for the rest of the year as sellers try to unload properties that have sat on the market for a record number of months.
``We're probably getting close to the trough, but I wouldn't rule out deeper declines,'' Sal Guatieri, a senior economist at BMO Capital Markets in Toronto, said before the report. ``Towards the end of the year we may see,'' the rate of price decline slow.
Home prices in 20 U.S. metropolitan areas fell 15.9 percent in the 12 months ended June, less than forecast and the most since records began in 2001, following a 15.8 percent drop in May.
Economists forecast the 20-city index would fall 16.2 percent from a year earlier, according to the median of 26 forecasts in a Bloomberg News survey. Estimates ranged from declines of 17.3 percent to 15.9 percent.
Year-Over-Year
Compared with a year earlier, all 20 areas showed a decrease in prices in June, led by a 29 percent drop in Las Vegas and a 28 percent decline in Miami.
On a month-over-month basis, nine cities showed an increase in property values, up from seven in May.
``While there is no national turnaround in residential real estate prices, it is possible that we are a seeing some regions struggling to come back, which has resulted in some moderation of price declines at the national level,'' David Blitzer, chairman of the index committee at S&P, said in a statement.
Robert Shiller, chief economist at MacroMarkets LLC and a professor at Yale University, and Karl Case, an economics professor at Wellesley College, created the home-price index based on research from the 1980s.
Other reports show price declines continue. The National Association of Realtors said yesterday that the median price of an existing home fell 7.1 percent in July from a year earlier, compared with a 6.1 percent drop in June.
Resales Rise
The Realtors group also said that resales increased from a 10-year low and the supply of unsold homes rose. There was a record 4.67 million unsold houses and condos on the market in July, representing 11.2 months' supply at the current sales pace, matching the highest rate ever.
The Commerce Department is scheduled to release its report on July new home sales later today. The figures will include information on prices and inventory.
The price gauges from Commerce and the Realtors group can be influenced by changes in the regional composition or types of homes sold. Purchases in areas with more expensive homes relative to cheaper properties will bias the figures up.
In contrast, the S&P/Case-Shiller index, and another by the Office of Federal Housing Enterprise Oversight, track the same houses over time and more accurately reflect price trends, economists said. The Ofheo figures are due at 10:00 a.m.
Bargain Hunting
Some companies are already seeing a pickup in interest because of lower prices.
``Buyers are coming back into the market,'' Tom McCormick, president of Astoria Homes, said in a Bloomberg Television interview last week. ``Remarkably low'' prices do ``seem to be bringing people in off the sidelines.''
Even so, tight credit conditions and ongoing declines in residential construction will weigh on economic growth in coming months, Federal Reserve policy makers said at their Aug. 5 meeting. The Fed's quarterly survey of bank loan officers showed 75 percent had made it tougher for prime borrowers to get a mortgage, more than in the April survey.
