Home Price Index gains may indicate
a real estate rebound
Source:
Informa Research Services
(9/30/2011) Consumers
in the market to buy a new home will find that home prices in many parts of the
nation are up, with some surprising gains in previously hard-hit
regions.
The
Standard's & Poor/Case-Shiller seasonally adjusted Home Price Index lists an
increased rate of listing values at nearly 1% for 20 of the nation's largest
metropolitan areas. Only two cities - Las Vegas and Phoenix - recorded a drop in
prices. The news is tempered somewhat by historical rates, however, as values
still reflect the effects of the recession on the housing
market.
"While
we have now seen four consecutive months of generally increasing prices, we do
know that we are still far from a sustained recovery," noted S&P chairman of
the Index Committee David Blitzer. "Eighteen of the 20 cities and both
Composites are showing that home prices are still below where they were a year
ago. Continued increases in home prices through the end of the year and better
annual results must materialize before we can confirm a housing market
recovery."
Some
regions are showing significant, longer-term gains, such as Detroit. Motor City
has experienced both monthly and year-over-year increases, with a June to July
growth in the rate of prices at 3.8%, the largest in the country by far. Since
the same period in 2010, the city has registered a 1.2% gain - the only of the
20 regions showing growth, other than a small improvement of 0.3% in
Washington.
For
those interested in purchasing real estate, the gains aren't all bad news. A modest increase in home prices can
spur more homeowners following the trend to list their property, opening up more
inventory. Any boost to the housing market can eventually be a boon to the
lending industry as well, and a stronger mortgage market may mean easier lending
terms for those seeking a loan. Homebuyers can research mortgage
rate tables to find the best rates, and may find them to be especially low thanks to
initiatives recently put into effect by the Federal Reserve.
Sellers
in certain regions may also benefit if the rising price trend continues. In
addition to Detroit and Washington, Minneapolis area home prices have risen by a
rate of 2.6%, which, added to the growing rate of sales in the region, may
indicate a stronger market.
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