Case-Shiller indices post 6th consecutive month-to-month gain
By Inman News, Tuesday, November 27, 2012
Consistent home price gains demonstrate that the housing recovery is on solid ground, the publishers of a leading home price index and other industry experts say.
The S&P/Case-Shiller national home price index — which tracks single-family home prices in all nine U.S. Census divisions on a quarterly basis — was up 3.6 percent from a year ago during the third quarter, and 2.2 percent from the second quarter.
The 10- and 20-city S&P/Case-Shiller home price indices posted month-to-month gains for the sixth month in a row, both rising 0.3 percent in September. The composites also posted annual gains for the fourth month in a row, rising 2.1 percent and 3.0 percent in September, respectively.
“We are entering the seasonally weak part of the year,” said David Blitzer, chairman of the index committee at the S&P Dow Jones Indices, in a statement. “Despite the seasons, housing continues to improve.”
“With six months of consistently rising home prices, it is safe to say that we are now in the midst of a recovery in the housing market,” Biltzer said.
Source: S&P Dow Jones Indices and Fiserv
Eighteen of the 20 large U.S. metros tracked by the 20-city composite index saw annual price gains in September, with Chicago and New York City the only metros recording dips.
A home price index maintained by the Federal Housing Finance Agency showed home prices up 4.0 percent from a year ago during the third quarter, and a 0.2 percent bump in September from August.
That index — which tracks homes with mortgages backed by Fannie Mae and Freddie Mac — showed home prices returning to June 2004 levels, but still down double-digit-percent points from an April 2007 high. It also shows the longest steady rise in home prices since the April 2007 high.
Source: Federal Housing Finance Agency
The S&P/Case-Shiller 20-city composite index shows home prices approximately 30 percent below a June/July 2006 peak in September, but it’s climbing; August’s index level was 35 percent away from that peak.
S&P/Case-Shiller 20-city composite index
Month in 2012 | Year-over-year change |
January | -3.9% |
February | -3.5% |
March | -2.5% |
April | -1.7% |
May | -0.5% |
June | 0.6% |
July | 1.1% |
August | 1.9% |
September | 3.0% |
Source: Calculated Risk
Writing on his blog, Calculated Risk, Bill McBride said the four consecutive months of year-over-year home price increases in September was the longest since 2010, when housing markets got a boost from the federal housing tax credit. Excluding the influence of the tax credit on the increases, September’s string of growth is the longest since 2006, he noted.
Source: Calculated Risk
Five factors have influenced rising home prices, reports the Wall Street Journal:
- Housing affordability is high. Price-to-rent and price-to-income measures favor home ownership in many markets.
- Household formation is increasing.
- Rents are going up.
- The share of distressed sales are decreasing.
- Inventories of for-sale homes are at record lows.
Metros in the 20-city composite posting the highest annual increases were Phoenix (20.4 percent), Minneapolis (8.8 percent), and Detroit (7.6 percent).
Metro area | September 2012 index level | Change from August | Change from a year ago |
Atlanta | 96.06 | 0.3% | 0.1% |
Boston | 157.26 | -0.6% | 1.9% |
Charlotte | 116.28 | -0.3% | 3.5% |
Chicago | 116.69 | -0.6% | -1.5% |
Cleveland | 102.10 | -0.9% | 1.4% |
Dallas | 121.57 | 0.2% | 4.4% |
Denver | 134.01 | 0.4% | 6.7% |
Detroit | 79.82 | 0.7% | 7.6% |
Las Vegas | 97.38 | 1.4% | 3.8% |
Los Angeles | 174.80 | 1.0% | 4.0% |
Miami | 150.24 | 0.1% | 7.4% |
Minneapolis | 126.02 | 1.1% | 20.4% |
New York City | 166.10 | -0.1% | -2.3% |
Phoenix | 120.65 | 1.1% | 20.4% |
Portland | 141.10 | 0.2% | 3.7% |
San Diego | 160.09 | 0.3% | 4.8% |
San Francisco | 143.15 | 0.5% | 7.5% |
Seattle | 142.09 | 0.3% | 4.8% |
Tampa | 134.90 | 0.0% | 5.9% |
Washington, D.C. | 192.36 | 0.0% | 3.2% |
Composite-10 | 158.93 | 0.3% | 2.1% |
Composite-20 | 146.22 | 0.3% | 3.0% |
Sources: S&P Dow Jones Indices and Fiserv.