There is continued good news about home prices from the S&P/Case-Shiller Home Price Indices today. Both the 10-City and the 20-City Composites increased 0.9 percent in August compared to the previous month. Nineteen of the 20 cities also increased month-over-month. The August 10-City Index number was 158.62 and the 20-City was 145.87 compared to 157.25 and 144.60 in July.
The annual increase for the 10-City index was 1.3 percent and the 20-City was up 2.0 percent and these increases were larger than those posted in July which were 0.6 percent and 1.2 percent respectively. The respective index numbers in August 2011 were 156.51 and 142.97. Seventeen of the 20 cities posted positive annual returns.
Seattle, the sole metropolitan area posting a negative monthly number was down 0.1 percent from August while the three cities with negative annual returns were Atlanta which fell 6.1 percent from a year earlier; New York was down 2.3 percent and Chicago 1.6 percent. Phoenix was the most improved among the 20 cities with an annual increase of 18.8 percent.
David M. Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices said that the positive return for Phoenix was its fourth consecutive month with annual increases in the double-digits and that even Atlanta's loss was a significant improvement compared to the nine consecutive months of double-digit declines it posted from October 2011 through this past June. Blitzer noted that the annual rate in Las Vegas also finally moved to positive territory with an increase of 0.9 percent in August, the first increase since January 2007.
"The sustained good news in home prices over the past five months makes us optimistic for continued recovery in the housing market," Blitzer said.
He continued, "News on home prices confirms other good news about housing. Single family housing starts are 43% ahead of last year's pace, existing and new home sales are also up, the inventory of homes for sale continues to drop and consumer mortgage default rates are reaching new lows. Further consumer confidence continues to rise. Even as we end the seasonally strong home buying period, the statistics are positive. For the fifth time in a row, both Composites had monthly gains. Home prices in Seattle fell modestly in August, but other than that the 20 cities have also seen home prices generally improve since April."
The above chart shows the index levels for the 10-City and 20-City Composite Indices. As of August 2012, average home prices across the United States are back to their summer/autumn 2003 levels for both composites. Measured from their June/July 2006 peaks, the decline for both is approximately 30% through August 2012 and approximately 35% from the June/July 2006 peak values. The August 2012 levels for both Composites are about 8.5% above their recent early 2012 lows.
The S&P/Case-Shiller Composite of 10 Home Price Index is a value-weighted average of the 10 original metro area indices. The S&P/Case-Shiller Composite of 20 Home Price Index is a value-weighted average of the 20 metro area indices. The indices have a base value of 100 in January 2000; thus, for example, a current index value of 150 translates to a 50% appreciation rate since January 2000 for a typical home located within the subject market.