Home Prices Flat in July, Trending Down After Tax-Credit Boost

Home salesThe closely-watched Case-Shiller index of home prices in 20 metropolitan areas managed a 0.6 percent increase in July from the previous month, with the outlook for prices remaining weak as sales and other indicators have slumped since the spring expiration of tax credits for homebuyers.
Standard & Poor’s index for June had jumped 4.2 percent, compared to the previous month.
Compared to July of 2009, the 20-city index is up 3.2 percent.
Housing market analysts generally see home prices stabilizing over the next few months, but not necessarily in certain metropolitan areas struggling with homes in some phase of foeclosure.
Bank repossessions – normally the final phase of a foreclosure – hit a record high in August for the third time in the last five months, according to RealtyTrac’s latest report.
Twelve of the 20 metropolitan areas in S&P’s Case-Shiller home price index showed month-over-month increases in July. San Diego posted its 15th consecutive monthly increase. Chicago, Detroit, New York and Washington DC posted monthly increases of more than 1 percent.
In July, “continuing its downward trend in all but two of the past 46 months, Las Vegas posted another index low as measured by the current housing cycle, when it peaked in August 2006. Peak-to-trough, that market is down 57 percent,” Standard & Poor’s said in its July update released today.
Also seeing prices decline in July were Charlotte, Dallas, Denver, Phoenix, Portland and Tampa.
The popular homebuyer tax credit program expired at the end of April, but covers closings through the end September.
“The year-over-year growth rates for 16 of the cities…weakened in July compared to June,” said David M. Blitzer, Chairman of the Index Committee at Standard & Poor’s. “While we could still see some residual support from the homebuyers’ tax credit, which covers purchases closing through September 30th, anyone looking for home price to return to the lofty 2005-2006 might be disappointed. Judging from the recent behavior of the housing market, stable prices seem more likely.”
See the July Case-Shiller report.

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