The situation for home prices is not looking good. According to the August reports for the S&P/Case-Shiller Home Price Indices and the Federal Housing Finance Agency’s (FHFA) House Price Index, both released today, prices have dropped around the country, and it appears that declines may be gaining speed.
While the S&P/Case-Shiller index, which tracks single-family home prices in metro areas across the U.S., reported increases of 0.2% in August for both its 10-city and 20-city composite indices, those numbers were not seasonally adjusted. Once seasonal factors are taken into account, the 10-city dipped 0.2% and the 20-city stayed flat. On an annual basis, both the 10- and 20-city indices were down, dropping 3.5% and 3.8%, respectively.
Ten of the 20 cities posted improvements from July. However, once data are seasonally adjusted, that number shrinks to six. On an annual basis, only two cities—Detroit and Washington—saw price gains, with Detroit in the lead with a 2.7% improvement. Prices in the Washington area were up just 0.3% from last year.
The FHFA’s index, which tracks purchase prices of homes with mortgages either guaranteed or owned by Fannie Mae or Freddie Mac across the nine U.S. Census regions, fell 0.1% from July to August. Only one region, South Atlantic, saw an uptick with a 0.9% gain. Two other regions, West South Central and East North Central, were flat from July, and the remaining six regions declined. The West North Central region fared the worst with a monthly drop of 1.3%.
On an annual basis, prices across the country fell 4.0%, according to FHFA data. Every region reported declines from August 2010, with the Mountain region down the most after a drop of 7.6%.
"House prices are slipping," wrote Patrick Newport, U.S. economist at IHS Global Insight, in a statement today, adding that "given how weak the housing market has been this year, it is surprising that prices have not fallen further."
Newport attributes the slower-than-expected rate of price declines to low interest rates and the slowing of foreclosures after robo-signing and other paperwork issues came to light.
"Recent evidence, though, indicates that the rate of decline has picked up," Newport wrote. "In August, seasonally adjusted prices declined in 14 of 20 cities. This was up from 12 cities in June and 10 in July." Newport also pointed to the FHFA’s monthly decline, the first in five months.
Claire Easley is a senior editor at Builder.