Another day, another upbeat housing statistic

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This morning’s happy housing news: homes are now worth what they were in the fall of 2003! Okay, so maybe that’s not the cheeriest way to frame the most-recent S&P/Case-Shiller data, though it does, I think, preserve an important piece of context.

If you want to have a glass-half-full sort of day, then a better way to look at the numbers is as follows.

September saw the fifth month-over-month gain in Case-Shiller’s index of home prices in 20 major metropolitan areas. (Remember that this data lags by a month the numbers put out by the National Association of Realtors, our topic of conversation yesterday.) Now, just 11 of those cities saw individual price gains on a seasonally-adjusted basis, down from 15 in August, but a lot of these gains and losses are measured in tenths of a percentage point—it doesn’t take a whole lot to knock a figure from positive to negative or vice versa.

The bigger picture is that the index’s year-over-year decline is now into the single digits. September marks the first time in 21 months that the drop wasn’t in the double digits.

That’s not to say everything is hunky dory. Just consider another report out this morning, from First American CoreLogic, which shows that nearly a quarter of all mortgage holders owe more than their house is worth. Some 40% of borrowers who took out home loans in 2006 are now underwater. And prices in some parts of the country have dropped so much that even people who took out loans five years ago with decent downpayments are upside down.

It’s going to take a whole lot more than a few months of price gains to change that.