The Wall Street Journal

30 August  2011

The spring-summer selling season pushed unadjusted U.S. home prices higher in June from a month earlier, the third-straight monthly increase, but prices remain below year-earlier levels, according to the Standard & Poor’s/Case-Shiller home-price indexes.

Home prices rose in April for the first time in eight months, though most of the improvement was believed to reflect the beginning of the typical home-buying season that occurs during the spring and summer months. The housing market has been struggling to recover due to high unemployment, an abundance of foreclosures and tighter mortgage requirements.

The Case-Shiller index of 10 major metropolitan areas rose 1.1% and the 20-city index was also up 1.1% in June from May. However, adjusted for seasonal factors, the sequential 10-city figure was flat while the 20-city index slipped 0.1%. Year-to-year, unadjusted June prices fell 3.8% for the 10 major markets while the 20-city index was down 4.5%.

Second-quarter home prices rose 3.6% on an unadjusted basis after falling 4.1% during the first quarter.

Of the 20 markets followed, 19 reported higher prices and Portland, Ore., was flat. Cleveland’s 1.5% increase puts the average home price in this market back above January 2000 levels. But all of the markets declined year-to-year, with Minneapolis seeing the biggest drop, 10.8% from a year earlier.

“This month’s report showed mixed signals for recovery in home prices. No cities made new lows in June 2011, and the majority of cities are seeing improved annual rates,” said David Blitzer, chairman of S&P’s index committee.

The National Association of Realtors last week reported that existing home sales in July fell 3.5% from June to a seasonally adjusted annual rate of 4.67 million, but rose 21% from a year earlier, when the home buyer tax credit expired. It was the fourth-straight monthly drop.