The prices of single-family homes in 20 major cities rose a seasonally adjusted 1.4% in June and were down 15.4% in the past year, according to the Case-Shiller home price index released Tuesday by Standard & Poor's. Home prices have risen two months in a row in 20 selected cities. Prices rose in 18 of the 20 cities. For the second quarter, the national Case-Shiller index rose 2.9%, the first time in three years that prices have risen.
Peter Boockvar (via The Big Picture) details why this data may not be as bullish as it first appears.
To highlight the seasonality of housing and its impact on pricing where the spring is the busiest of the year, the S&P/Case Shiller Index, which does not seasonally adjust its m/o/m pricing, has shown its best performance in Q2 in every year except one going back to ‘01. ‘09 is of course not complete but Q2 saw a gain of 1.3% after a drop of 7% in Q1. On the downside in ‘07 and ‘08, Q2 saw the smallest decline and in the boom years in ‘04, ‘05 and ‘06, Q2 saw the biggest rise.
In ‘03, Q3 price gains barely exceeded the Q2 rise while in ‘01 and ‘02, Q2 had the best price increases. The price data seen is welcome relief but it’s that time of the year and the $8000 tax credit and slowing foreclosure rate had its impact. Add to this the still punk Present Situations component in Confidence and it helps to explain again, the lack of belief in the sustainability of recovery that the bond market has relative to stocks.