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Economy in Brief

Case-Shiller Home Price Index Decline Eases
by Tom Moeller July 28, 2009

The declines in home prices are moderating. That's the message from May's 0.2% seasonally adjusted decline in the S&P/Case-Shiller Home Price Composite Index of twenty metro-markets. The moderation eased the y/y drop to 17.1% but prices still were down by nearly one-third since the peak in May 2006. The May decline in prices was less than the expected 17.9% y/y drop, and not seasonally adjusted, prices even posted an increase of 0.5% for the month.

The Case-Shiller index of 20 U.S. cities and their surrounding areas is value-weighted. A greater index weight is assigned to more expensive homes and the series dates back only to 2001. The S&P/Case-Shiller home price series can be found in Haver's USECON database and the city data highlighted below is in the REGIONAL database. Here is a link to the latest press release from Standard & Poor's. An overview of the S&P/Case-Shiller home price series can be found here.

pThe Case-Shiller composite index of home prices in 10 metropolitan areas, which has a longer history and dates back to 1987, also fell a lessened 0.2% last month and was down 16.8% year-to-year. This measure also was down by nearly one-third since the 2006 peak.

Less Weak Regions:   Home prices in some areas of the country have firmed lately though they remain down year-to-year.  In Cleveland, Ohio prices rose for the second month (-6.2% y/y) and in Dallas prices rose slightly m/m as well (-4.2% y/y). Prices ticked up 0.3% in Denver (-4.6% y/y).  Boston prices also ticked higher during the month (-7.2% y/y) and in Chicago home prices rose slightly (-17.5% y/y). In New York prices slipped m/m (-12.2% y/y) and are off roughly 20% from their 2006 peak. In Charlotte, North Carolina prices also continued down but just moderately (-10.1% y/y.).

Weakest Regions: Home prices in Phoenix, Nevada were quite weak and fell another 1.7% m/m (-34.2% y/y. Home prices in Las Vegas, Nevada continued their rapid rate of decline with a 3.1% m/m drop (-32.0% y/y, and also were down by roughly one-half from their peak. Home prices in Miami again fell a hard 1.1% (-25.1% y/y while home prices in Los Angeles continued to fall sharply (-19.8% y/y). In Tampa, the rate of monthly price decline slowed slightly to just 0.5% but prices still were off 20.8% y/y. In Detroit, the monthly rate of price decline also eased considerably (-24.5% y/y) but prices were off by early one-half from the peak. In San Francisco prices rose 0.7%, but remained off 26.1% y/y.

Released last week was the House Price Index (HPH) from the Federal Housing and Finance Agency (FHFA). The index rose 0.9% from April for just the third monthly increase since 2005. Year-to-year, that was enough to lessen the decline in the nationwide average of home prices to 5.6% from its worst reading of -8.9% last November. The FHFA uses data provided by Fannie Mae and Freddie Mac. The series differs from Case-Shiller in that it is not value-weighted, it covers a greater area and it has a shorter history.

S&P/Case-Shiller Home Price Index (SA, Jan 00 = 100) May April Y/Y 2008 2007 2006
20 City Composite Index 140.05 140.28 -17.1% -15.8% -3.8% 7.6%

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