This morning S&P/Case-Shiller released their monthly Home Price Index, a leading measure of changes in the price of homes on the residential real-estate market (NYSE:IYR). The new data covers May 2011, and shows minor growth month-over-month, though prices remain extremely low, even compared to 2010 levels, and the housing market remains the biggest drag on the economy.
According to the S&P, housing prices fell by 4.5% in May compared to the previous year. However, continuing April’s upward trend, home prices did increase month-over-month by 1.0%. While May’s sales were slightly up over April, it isn’t yet clear whether that improvement reflects a growing market, or whether it was simply up because of the seasonal change, with May typically being prime home-buying season. It’s also possible that government delays on foreclosures, which normally sell for 20% less than market value, could be temporarily allowing averages to rise only to pull down the market later on.
The S&P/Case-Shiller report consists of 10-city and 20-city composite rankings for major metropolitan areas. The 10-city composite shows a decline of 3.6% from 2010 levels but an increase of 1.1% over April, while the 20-city composite was down 4.5% year-over-year and up 1.0% from April. The Index also shows that prices rose month-over-month in 16 of 20 cities tracked. Detroit, Las Vegas, and Tampa were down for the month while Phoenix was unchanged. On a year-over-year basis, Washington DC was the only MSA with a positive rate of change, with housing prices up 1.3% over last year. The other 19 MSAs were down year-over-year, with Minneapolis faring the worst, declining 11.7%.