Home Prices Up in April: Standard & Poor's

By:: Kirk Haverkamp | June 29, 2010

Housing prices turned upward in April, posting a seasonally adjusted monthly gain of 0.4 percent, according to the Standard & Poor’s/Case-Shiller Home Price Index of 20 major U.S. markets.

The increase reversed two months of downturns in the February and March surveys, and represented a 3.8 percent annual gain over April 2009, which marked the low point of the market following the downturn.

Prices were up in 18 of the 20 markets surveyed, with only the New York City and Miami metropolitan areas showing declines.

The monthly gains were driven in large part by the approaching April 30 deadline for home sales to qualify for the federal homebuyer tax credit, said David Blitzer, chair of the Index Committee at Standard & Poor’s. He said the end of the program will likely have a significant impact on the market, noting that other sources have reported sharp declines in home sales and housing starts in May, and that it may be next year before housing can make a sustained contribution to economic growth.

Despite posting a 3.8 annual gain, home prices in the 20-city index remain relatively close to their April 2009 low point and are 30 percent below their peak reached in July 2006. Prices currently are at roughly the same level they were in late summer/early fall of 2003.

Many individual markets continue to struggle, with nine of the 20 metropolitan areas surveyed reaching new lows since the first of the year, with New York City hitting a new low in April. Despite the annual increase in the overall index, eight of the 20 metropolitan areas posted annual declines in April. Much of the gains were concentrated in the California markets of San Francisco, San Diego and Los Angeles, which posted annual returns of 18.0 percent, 11.7 percent and 7.8 percent, respectively.

The gains in California are notable because that state was one of the hardest-hit by the downturn in housing values. Another, the Phoenix, Ariz. market, posted a 5.8 percent annual increase in April’s survey.

Other hard-hit markets are not faring as well. Las Vegas, Nev., which has seen the steepest declines since the peak of the housing market, showed an 8.5 percent annual decline as of April, worst among the 20 cities in the survey, while Detroit was down 3.0 percent and Miami was down 0.5 percent.

The S&P/Case-Shiller Home Price Indices are based on arms-length, repeat sales of single-family homes in 20 selected U.S. metropolitan areas and are published on the last Tuesday of each month.

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