US home prices rose 1.6% month on month in July according to the S&P/Case-Shiller 20-city composite index. But more importantly all 20 cities measured by the index recorded positively monthly changes for the 3rd straight month, and in the month before only Detroit broke the streak. This record, combined with the 1.2% year on year growth up from 0.6% in June, is almost undeniable proof that the US housing market has finally turned a corner.
Not undeniable perhaps on its own, but amidst all the other evidence that the market is performing much better, 3 straight months growth in what is the most widely respect index of all is pretty hard to ignore.
Other evidence includes that of the National Association of Realtors, which said prices had been rising for 5 straight months in July and rose for the sixth straight month in August, taking the annual increase in the median price to 9.5% compared to August 2011. The last time the US' largest real estate association recorded 6 straight months of growth in the media house price was between December 2005 and May 2006, in other words before the market crashed. Likewise the annual growth of 9.5% recorded in August is the biggest recorded by the NAR since January 2006 when prices rose 10.2% from a year earlier.
All fuelled according to the NAR by sales growth. Total existing home sales, which are completed transactions that include single family homes, town homes, condominiums and co-ops, rose 7.8% to a seasonally adjusted annual rate of 4.82 million in August, up from 4.47 million in July, and up 9.3% compared to the 4.41 million units recorded in August 2011.
David M. Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices summed it up in his statements regarding the S&P index:
"The news on home prices in this report confirm recent good news about housing. Single family housing starts are well ahead of last year's pace, existing home sales are up, the inventory of homes for sale is down and foreclosure activity is slowing. All in all, we are more optimistic about housing."
- Friday 28 September 2012