Home prices are finally starting to rebound. At least, that’s what the recent S&P/Case-Shiller National Home Price Index revealed in September. According to this closely-watched report, which covers more than 80% of the housing market in the United States, the typical home price rose 1.6% in July, when compared to the previous month.
This growth marked the third straight month in which prices in all of the index’s 20 major markets improved. It would have been the fourth straight month of improvement across the board if not for a slight decline in Detroit in the month of April.
Overall, the index was up 1.2% in July compared to a year earlier, which was an improvement from the year-over-year change reported for June. A CNN Money article reports that, while home prices have been experiencing sequential change in recent months, June was the first month that saw prices higher than a year earlier.
“The news on home prices in this report confirm recent good news about housing,” David Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices was quoted as saying in the CNN article. “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.”
Of the 20 major metros surveyed through the index, Phoenix experienced the biggest boost. According to a recent article from AmericanBanker.com, “The recent recovery in housing prices has been strongest in Phoenix, where prices rose 1.8% from July to August, and have surged 18.8% in the last year.”
The reason for the uptick has to do with record low mortgage rates and an inventory that seems to be getting tighter by the minute. Although job growth has also contributed to the overall improvement in home prices, the increase of jobs in recent months has been slower than originally anticipated.
Yes, it would seem as though the worst of the housing crisis is behind us. Nevertheless, housing professionals remain cautiously optimistic, avoiding any definite declaration of recovery.