Best of the Week

U.S. House Price Indexes Stability?

Housing-Market / US Housing Jun 29, 2011 - 02:54 AM GMT

Latest reports on home prices are somewhat encouraging. The Case-Shiller Home Price Index (HPI) of April edged down 0.1% on a seasonally adjusted basis and advanced 0.7% on a seasonally unadjusted basis from March. The seasonally adjusted drop of the Case-Shiller HPI is smallest since July 2010.

The Case-Shiller HPI rose in nine out of the twenty metro areas in April. Other home price measures also suggest that prices are stabilizing. The FHFA HPI rose 0.8% in April, the first since May 2010, while the overall Core Logic HPI held nearly steady and the HPI excluding distressed properties moved up 1.3%, the fourth monthly gain.

On a year ago basis, the Case-Shiller Home Price Index declined 4.0% in May; the downward trend is consistent with the Core Logic Price Index which includes distressed properties (see Chart 2). However, the Core Logic Price Index excluding distressed properties fell only 0.5% in April. These HPI readings suggest that home prices are stabilizing. Stability of home process implies that net worth of households is not being eroded and households face fewer constraints if they choose to refinance their home mortgage.

Asha Bangalore — Senior Vice President and Economist

http://www.northerntrust.com

Asha Bangalore is Vice President and Economist at The Northern Trust Company, Chicago. Prior to joining the bank in 1994, she was Consultant to savings and loan institutions and commercial banks at Financial & Economic Strategies Corporation, Chicago.

The opinions expressed herein are those of the author and do not necessarily represent the views of The Northern Trust Company. The Northern Trust Company does not warrant the accuracy or completeness of information contained herein, such information is subject to change and is not intended to influence your investment decisions.

Only logged in users are allowed to post comments. Register/ Log in

The Market Oracle is a FREE Financial Markets Forecasting & Analysis web-site.
(c) 2005-2013 MarketOracle.co.uk (Market Oracle Ltd) - Market Oracle Ltd asserts copyright on all articles authored by our editorial team and all comments posted. Any and all information provided within the web-site, is for general information purposes only and Market Oracle Ltd do not warrant the accuracy, timeliness or suitability of any information provided on this site. nor is or shall be deemed to constitute, financial or any other advice or recommendation by us. and are also not meant to be investment advice or solicitation or recommendation to establish market positions. We do not give investment advice and our comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to enter into a market position either stock, option, futures contract, bonds, commodity or any other financial instrument at any time. We recommend that independent professional advice is obtained before you make any investment or trading decisions. By using this site you agree to this sites Terms of Use. From time to time we promote or endorse certain products / services that we believe are worthy of your time and attention. In return for that endorsement and only in the cases where you purchase directly though us may we be compensated by the producers of those products.