We here at Consumerist are eternal optimists. Which is why we popped open the champagne this morning when the latest S&P/Case-Shiller index showed a .5% year-over-year increase in home prices for June, the first such uptick since late 2010.
While some would say it’s not great news that we are still 31% down from the peak prices of 2006, we would point out that a lot of homes were drastically overpriced at that point, so the latest numbers at least indicate that home prices are reaching a more realistic value.
From the Wall Street Journal:
Today, prices are rising amid sharp declines in the number of homes for sale as banks are taking back fewer foreclosed homes and traditional sellers have held out for better prices. Meanwhile, record-low mortgage-interest rates have dramatically increased the purchasing power of buyers. Also, investors have scooped up bargain-priced foreclosures that can be converted into rental properties.
“We seem to be witnessing exactly what we needed for a sustained recovery; monthly increases coupled with improving annual rates of change,” said David Blitzer, chairman of S&P’s index committee. “The market may have finally turned around.”
The index measures home prices in 20 major U.S. markets, and found year-over-year increases in 13 areas. The most dramatic increase was in Phoenix, where home prices jumped up 13.9%.
Meanwhile, home prices in Atlanta dropped by 12.1%, the largest decline in the survey. On a silver-lining note, the rate of decline appears to be slowing down in the six cities where home prices dropped.
Home Prices Post First Gain in Two Years [WSJ.com]