Top 20 Cities in the United States See a 1.4% Month-on-Month Increase in Housing Prices in June
The S&P Dow Jones Indices released the nationwide Case-Shiller home price report on Tuesday, indicating that the decline in home prices in the top 20 cities in the United States in June was less than market expectations, suggesting that the downturn in the U.S. real estate market, which has been dragging the economy into the most severe recession since the 1930s, is beginning to improve.
The report shows that the home price index for the top 20 cities in the United States decreased by 15.4% year-on-year in June, marking the smallest decline since April 2008. Compared to May of this year, home prices in the top 20 cities increased by 1.4% month-on-month in June, achieving the largest monthly increase in U.S. home prices in four years.
The decline in home prices, along with government stimulus measures, has enhanced the purchasing power of first-time homebuyers, stimulating an increase in home sales, which will ultimately prevent further declines in home values. The simultaneous rise of the real estate market and the stock market will help reverse the trend of U.S. household wealth shrinking at a record pace. During this economic recession, consumer spending, which accounts for about 70% of the U.S. economy, has been severely suppressed by the significant reduction in household wealth.
Before the release of the home price report for the top 20 cities in the United States, Maxwell Clarke, Chief U.S. Economist at IDEAglobal in New York, stated, "Home prices have finally started to rebound." According to the average expectations of 31 economists surveyed by Bloomberg News, home prices in the top 20 cities in June were expected to decline by 16.4% year-on-year, with expectations ranging from a decline of 15.7% to 17.1%. The figure for May had dropped by 17.06%. The market's average expectation was that the average home price in the top 20 cities would decline by 16.40% month-on-month in June.
S&P has been tracking the home price index for major U.S. cities since 2001; since January 2007, the home price index for major U.S. cities has been declining every month.
Tuesday's report showed that compared to May of this year, the average home price in the top 20 cities in the United States increased by 1.4% month-on-month in June, marking the second consecutive month of increase and achieving the largest monthly increase since June 2005. However, the monthly home price index is not seasonally adjusted, so some economists prefer to study the annual trends in home prices rather than focusing on month-to-month comparisons.
David Blitzer, Chairman of the S&P Case-Shiller Home Price Index Committee, stated in a statement, "We are seeing some positive signs. Today's data suggests that the real estate market is showing signs of recovery from the bottom."
The June home price report indicates that home prices in the top 20 cities have decreased compared to the same period last year, with the largest decline in Las Vegas, where home prices fell by 32% year-on-year; the smallest decline was in Dallas, where home prices fell by 2.2% year-on-year.
Compared to May of this year, 18 out of the 20 cities saw an increase in home prices, with only two major cities experiencing a decrease from the previous month. Cleveland and San Francisco had the largest month-on-month increases in home prices.
The home price data released today indicates that, overall, national home prices in the second quarter of this year decreased by 14.9% compared to the same period last year, marking the smallest decline on record. Compared to the first quarter of this year, national home prices increased by 2.9% in the second quarter, marking the first increase in three years.
Meanwhile, there are signs that the most severe period of crisis in the real estate market has passed. The National Association of Realtors reported that, driven by falling home prices, government tax incentives for first-time homebuyers, and historically low mortgage costs, sales of existing homes in the United States surged to a nearly two-year high in July.
