Pace Of Decline In Home Prices Continues To Slow In July

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While home prices continue to show a notable decline compared to a year ago, Standard and Poor's released a report Tuesday morning showing that the pace of decline in home prices slowed for the sixth consecutive month in July.

The report showed that the S&P/Case-Shiller 20-City Composite Home Price Index fell at an annual rate of 13.3 percent in July compared to the 15.4 percent drop reported for June. Economists had expected the index to be down 14.2 percent year-over-year.

David M. Blitzer, Chairman of the Index Committee at Standard & Poor's said, "The rate of annual decline in home price values continues to decelerate and we now seem to be witnessing some sustained monthly increases across many of the markets."

"But we do need to be cautious in coming months to assess whether the housing market will weather the expiration of the Federal First-Time Buyer's Tax Credit in November, anticipated higher unemployment rates and a possible increase in foreclosures," Blitzer added.

While prices in all twenty metro areas continued to show annual declines, Cleveland, Dallas and Denver are closing in on positive territory, with July prices down 1.3 percent, 1.6 percent, and 2.9 percent, respectively.

On a monthly basis, 16 metro areas reported price growth in excess of 1.0 percent, with prices in Minneapolis and San Francisco showing the strongest monthly growth. Only Seattle and Las Vegas showed monthly price declines.

The 20-City Composite Home Price Index was up 1.6 percent on a monthly basis in July following a 1.4 percent increase in June.

Commenting on the data, Peter Boockvar, equity strategist for Miller Tabak, said, "This data is not seasonally adjusted and combining the seasonal strong time of the year with the $8,000 first time home tax credit and a moderation in the pace of foreclosures and we have continued stabilization in the home price data."

"With an expected pick up in foreclosures, continued compression in higher end home prices and the uncertain fate of the tax credit, we'll see if the improvements in pricing can continue in the face of this," he added.

Looking ahead, Boockvar said, "The worst of the financial crisis will end when home prices stop going down and I don't believe we've seen the worst of the price declines in this cycle notwithstanding the recent government induced bounce."

While home prices continue to show a notable decline compared to a year ago, Standard and Poor's released a report Tuesday morning showing that the pace of decline in home prices slowed for the sixth consecutive month in July. The report showed that the S&P/Case-Shiller 20-City Composite Home Price Index fell at an annual rate of 13.3 percent in July compared to the 15.4 percent drop reported for June. Economists had expected the index to be down 14.2 percent year-over-year. (Market News Provided by RTTNews)