Home prices across the country slipped in August, according to data released by ""Standard & Poor's"":http://www.standardandpoors.com Tuesday. The agency's closely-watched gauge of residential property[IMAGE]values recorded a 0.1 percent drop in the composite reading of 10 cities tracked, while the 20-city composite posted a 0.2 percent decline between July and August.
Home prices decreased in 15 of the survey's 20 metropolitan statistical areas on a month-to-month basis. Only Chicago, Detroit, Las Vegas, New York, and Washington D.C. posted what S&P called ""marginal improvements"" in home prices over July.
The ""S&P/Case-Shiller Home Price Indices"":http://www.standardandpoors.com/indices/sp-case-shiller-home-price-indices/en/us/?indexId=spusa-cashpidff--p-us had been on an upward trajectory since April as increased buying activity prompted by the federal government's homebuyer tax credit helped to push prices higher. But home sales took a sharp dive following the expiration of the tax credit and the effect of that falloff is now evident in home price trends across the country.
The S&P/Case-Shiller 10-city composite remains up 2.6 percent from August 2009 levels. The 20-city composite is 1.7 percent above a year earlier.
But David M. Blitzer, chairman of the index committee at Standard & Poor's, points out that over the last four months both composites have shown ""slowing growth,""
[COLUMN_BREAK]after sustaining consistent gains since their April 2009 troughs.
Blitzer's take on the latest numbers: ""A disappointing report."" He says the fact that year-over-year gains are starting to weaken indicates housing markets will continue to bounce along the recent lows.
""Indeed, the housing market appears to have stabilized at new lows,"" Blitzer said. ""At this time, it does not seem that any of the markets are hanging on to the temporary momentum caused by the homebuyers' tax credits.""
A ""separate report"":http://www.fhfa.gov/webfiles/19440/AugHPI102610F.pdf released Tuesday by the ""Federal Housing Finance Agency"":http://www.fhfa.gov (FHFA) showed that home prices rose 0.4 percent from July to August. The FHFA monthly index is calculated using purchase prices of houses backing mortgages that have been sold to or guaranteed by Fannie Mae or Freddie Mac.
The analysts at ""Capital Economics"":http://www.capitaleconomics.com say the disparity in the two reports may suggest any fall in home prices is temporary, reflecting the plunge in homes sales during the summer months.
“But we still fear that continued weak demand and high supply will push prices gradually lower over the next 12-18 months,†said Paul Dales, U.S. economist for research firm. “The current unfavorable balance between demand and supply is certainly consistent with a sustained fall back in prices.â€Â
As of August 2010, S&P says average home prices across the United States are back to the levels they were at in late 2003 and early 2004.
From June/July 2006 through August 2010, the peak-to-current declines for both composites measured in the S&P/Case-Shiller Home Price Indices are down about 28 percent. The 10-city composite has gained back 7.8 percent from the home price trough hit in April 2009. The 20-city composite has recovered 6.7 percent.