Another Downleg in Housing Prices

By Dirk van Dijk

In July, home prices started to slip again, but unevenly across the country. The Case-Shiller Composite 10 City index (C-10) rose 0.03% on a seasonally adjusted basis, and is up 4.01% from a year ago. The broader Composite 20 City index (which includes the cities in the C-10) fell by 0.13% on the month and is up 3.13% from a year ago.

In June, the year-over-year gains were 5.02% for the C-10 and 4.22% for the C-20, so it looks like the year-over-year gains are rolling over. Of the 20 cities, only four posted gains on the month, while 16 saw prices fall. Year-over-year, 10 metro areas saw gains and 10 suffered losses. In June, 15 were up year over year and 5 were down.

There is a seasonal pattern to home prices, and thus it is better to look at the seasonally adjusted numbers than the unadjusted numbers. Most of the press makes the mistake of focusing on the unadjusted numbers. While the 4.01% rise in the C-20 is good news, it hardly makes up for the damage that was done in the popping of the housing bubble, and it is also unlikely to last. (more)