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.