The U.S. housing sector's long and winding road back to health continues: U.S. home prices in 20 cities rose for the fifth straight month, according to the S&P/Case-Shiller U.S. National Home Price survey.
"We have seen broad improvement in home prices for most of the past six months," David M. Blitzer, chairman of the Index Committee at Standard & Poor's, said in a statement. "However, the gains in the most recent month are more modest than during the seasonally strong summer months. Nationally, the U.S. National Composite rose by 3.1% in both the second and third quarters of 2009. Both the 10-City and 20-City Composites posted their fifth consecutive monthly increase with September's report."
Further, in September both the 20-city and 10-city indexes continued to show monthly improvement in the their annual returns. The 20-city index declined 9.4%, but that was an improvement from the 11.3% year-over-year drop recorded in August. The 10-city index fell 8.5%, better than August's 10.6% decline.
Economists surveyed by Bloomberg News had expected the 20-city index to fall 9.1% in September. The index fell 11.3% in August, 13.3% in July, and 15.4% in June.
In September, 10 cities registered one-month price declines, one was flat and nine registered gains. Registering the highest one-month gains were Minneapolis, up 1.8%; Detroit, up 1.8%; and San Francisco, up 1.3%. The cities recording the largest one-month declines were Cleveland, down 1.6%; Las Vegas, down 0.9%; Dallas, down 0.7%; and Charlotte, N.C., down 0.7%.
The areas with the largest year-over-year percentage declines were: Las Vegas, 28.6%; Phoenix, 21.8%; Detroit, 19.2%; Tampa, 16.7%; and Miami, 16.2%.
Year-over-year percentage price declines in other major U.S. cities were as follows: New York, 9.0%; Chicago, 10.6%; Boston, 3.3%; Washington, D.C., 5.0%; Atlanta, 9.3%; Dallas, 1.2%; Denver, 1.2%; Los Angeles, 9.0%; San Francisco, 7.8%; and Seattle, 13.8%.
Originally greeted by Wall Street with a shrug, the S&P/Case-Shiller Home Price Index rose to market-mover status in 2008 as it became clear that the U.S. housing boom was fueled considerably by mortgage market excesses. The bursting of that bubble triggered record levels of home mortgage foreclosures and defaults of mortgage-backed securities. Those securities became the toxic assets at the heart of the ongoing financial crisis.
Today's report is another sign of a housing turnaround in September. Even so, investors -- and certainly potential homebuyers -- shouldn't become overly bullish. Home inventories remain high, and prices could start to fall again at any sign of a stall in the U.S. economy. What's needed now? Job growth to increase household formation, which historically has been a major catalyst for home price gains.
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