Home prices rose in July, according to the S&P/Case-Shiller home price index, and have now risen for four straight months. The bad news? Home prices generally rise in July, and they’re still down 4.1 percent year on year.
The index rose 0.9 percent, above consensus expectations of 0.7 percent, according to Reuters, while 17 of the 20 cities measured had price increases from a month before. But prices often rise in summer as the kids get out of school and parents focus on buying a new place before the fall semester begins. So it’s a better measure of the market to look at the numbers on a seasonally adjusted basis. By that measure, the 20-city index was flat month to month. Of course, given how lousy the housing data has been for the past couple of years, that in itself is not bad news.
In terms of a year-over-year dip, prices were down more than 4 percent. For those of you watching the slope of the line, the year-over-year drop had been 4.6 percent the month before.
So, flat housing prices, with smaller year-over-year declines — great news, right? Unfortunately, it’s still too early to tell if the national trends will hold. However, looking at the 20 cities that compose the Case-Shiller Index, there are a couple of local bright spots where the data are up both month-over-month and year-over-year, notably Washington, D.C., (up 2.4 percent month-over-month and 0.3 percent year-over-year) and Detroit (up 3.8 percent month-over-month and 1.2 percent year-over-year).
Separately, new-home sales hit a new low, coming in at a seasonally adjusted annual rate of 295,000 units. Before you worry about that, bear in mind that new home sales have been declining for years, slowly being squeezed out as a component of total real estate activity. In 2001, for instance, new home sales accounted for 17.5 percent of all real estate activity. With the latest numbers, they’re 5.9 percent.
So while an uptick in new home sales would certainly be great news — homebuilding creates jobs — I don’t think the decline is anything to worry about.