An unclear US housing report

Posted by Cardiff Garcia on Jun 28 14:50.

Last month’s Case-Shiller report confirmed that the much-lamented US housing double dip was official; this morning’s numbers tell a slightly more complicated story, but not one that’s necessarily better.

Housing prices declined again year-over-year (seasonally adjusted), but this was still the first monthly increase in some time. From the release, emphasis ours:

Data through April 2011, released today by S&P Indices for its S&P/CaseShiller1 Home Price Indices, the leading measure of U.S. home prices, show a monthly increase in prices for the 10- and 20-City Composites for the first time in eight months. The 10- and 20-City Composites were up 0.8% and 0.7%, respectively, in April versus March.  Both indices are lower than a year ago; the 10-City Composite fell 3.1% and the 20-City Composite is down 4.0% from April 2010 levels. …

“In a welcome shift from recent months, this month is better than last – April’s numbers beat March,” says David M. Blitzer, Chairman of the Index Committee at S&P Indices. “However, the seasonally adjusted numbers show that much of the improvement reflects the beginning of the Spring-Summer home buying season. It is much too early to tell if this is a turning point or simply due to some warmer weather.

Best not to celebrate the monthly uptick, then.

We always like to remind readers when this report comes out that the Case-Shiller numbers operate on a lag. To repeat ourselves a bit: the index is a moving average of the three months, so it’s capturing activity in February and March. And there is an even bigger lag involved, as the data recorded even in these months are from home sales that closed about a month or two prior.

We’ve also noted recently the debate about whether other, more timely measures of housing are painting a more optimistic picture. At the end of May, Citi analysts looked at figures from Radar Logic and Altos showing that housing prices had just started climbing again in March and April. But those assessments have been contradicted by Clearcapital, which also showed a double dip through April. Meanwhile, the most recent data from CoreLogic matches up with the Case-Shiller numbers: a seasonally-adjusted decline from the same month last year, but the first monthly increase in a while.

So it’s complicated, and we’ll have to wait to wait a little longer to see if this signals a meaningful change for the better — but as the choice is between complicated and hopelessly glum, we’ll take what we can get.

Related links:
Haunted housing – FT Alphaville
Are US house prices not falling after all? – FT Alphaville

This entry was posted by Cardiff Garcia on Tuesday, June 28th, 2011 at 14:50 and is filed under Capital markets. Tagged with .

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