Economists surveyed by Bloomberg News had expected the S&P/Case-Shiller Home Price Index to fall 16.4 percent in June, on a year-over-year basis. The index fell at a 17.1 percent pace in May and 17.9 percent in April.
Further, home prices in the 10-city index declined at a 15.1 percent annual rate in June, compared to a 16.8 percent annual rate in May.
After 16 consecutive months of record annual declines, beginning in October 2007 and ending in January 2009, the indices have now shown five consecutive months of an improvement in annual returns.
Equally significant, only two cities, Detroit and Las Vegas, registered price declines in June: 18 cities registered price increases.
And there was especially good news for Cleveland-area residents: your city registered the largest increase in June, 4.2 percent.
Further, on a Q2-to-Q2 basis, prices declined 14.9 percent, still a large decline, but a substantial improvement compared to the record 19.1 percent decline in Q1-to-Q1.
June data: "Continued firming"
"This is another positive report, one that shows continued firming," economist Andrew Hill told DailyFinance Tuesday. "We're starting to pull out of the housing decline, with actual price increases, which is gratifying because of large 3-year declines. We still have a ways to go before we can say a home sector recovery has begun but the June report is more evidence of housing sector stabilization."
The areas with the largest annual percentage declines were: Phoenix, -31.6 percent, Las Vegas, -32.4 percent, Detroit, -25.0 percent, Miami, -23.4 percent, and San Francisco, -22.0 percent.
Year-over-year percentage price changes in other major U.S. cities were as follows: New York, -11.9 percent, Chicago, -16.7 percent, Boston, -5.9 percent, Washington, D.C., -11.8 percent, Atlanta, -13.7 percent, Tampa, -19.5 percent, Dallas, -2.2 percent, Denver, -2.6 percent, and Seattle, -16.1 percent.
Originally greeted by Wall Street with a shrug, S&P/Case-Shiller home price data rose to market-mover status in 2008 as it became clear that the United States' housing boom during the past decade was, in fact, a bubble fueled considerably by mortgage market excesses, from borrower to lender. The bursting of that bubble triggered record home mortgage foreclosures and mortgage back securities defaults (toxic assets), which led to the financial crisis that the U.S. and world are still trying to end today.
As a result, investors, economists, homebuilders, and homeowners alike now closely-monitor Case-Shiller home price data in order to discern clues as to when the housing slump may end -- a recovery that historically has contributed to U.S. GDP growth.
Economic Analysis: Notch another modest victory for the U.S. housing sector. Price declines in 20 major cities continue to decelerate -- which means they are bottoming. And, as noted, they're rising in most major American cities. Still, investors and potential home buyers should not become overly bullish: home inventories remain high, and any signs of economic weakness, or a failure of the U.S. economy to recover on time, could cause prices to fall back. That said, if the nation's economy continues to recover, the firming of home prices and the upward trend in selected cities should continue.
