Home prices rose in April, reversing a seven-month decline, according to the latest S&P/Case-Shiller Home Price Index.
U.S. home prices rose an average 1.3 percent in the month of April, reversing a seven-month decline and bringing home prices back up to 2003 levels, according to the S&P/Case-Shiller Home Price Indices released today. On a monthly basis, 19 of the nation’s 20 largest cities showed improvements, while Detroit saw prices fall 3.6 percent.
“With April 2012 data, we finally saw some rising home prices,” David M. Blitzer, chairman of the Index Committee at S&P Indices, said in a statement. “It has been a long time since we enjoyed such broad-based gains. While one month does not make a trend, particularly during seasonally strong buying months, the combination of rising positive monthly index levels and improving annual returns is a good sign.” (Millionaire Corner research finds that most affluent investors remain skeptical about investing in real estate.)
Though home prices remain below levels for April 2011- down 2.2 percent for the 10-City Composite Index and 1.9 percent for the 20-City Composite - the annual rate has improved since March, when prices were down 2.9 percent year-over-year for the 10-City Composite and 2.6 percent for the 20-City.
In April, Atlanta was the only city to post a double-digit annual drop of 17 percent in home prices, while 10 of the 20 major metropolitan areas saw a year-over-year increase. Cities showing annual increases in April were Boston, Charlotte, Dallas, Denver, Detroit, Miami, Minneapolis, Phoenix, Tampa and Washington, DC.
In another positive sign for the housing market, sales of new, single-family homes increased 7.6 percent in May to an annual rate of 369,000, according to data released yesterday by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.
“May’s sales report is a welcome sign that the market has returned to a more solid growth path following lackluster reports in March and April, and is in keeping with our expectations for continued, steady improvement through the end of this year,” David Crowe, chief economist for the National Association of Home Builders, said in a statement released yesterday. “While the current sales rate remains low by historical standards and continues to be constrained by challenges related to credit availability for builders and faulty appraisals, the ongoing decline in the month’s supply of new homes will necessitate additional construction in certain markets going forward.” (Older investors are more likely to advise young people to contribute to a 401(k) than buy a home.)
Home prices remain down 34 percent from their peak in the summer of 2006, according to Case-Shiller, and home prices in Atlanta, Cleveland, Detroit and Las Vegas remain below 2000 levels.