WASHINGTON (AP) — Home prices rose in August in half of major cities measured by a private survey, a sign that prices are stabilizing in some hard-hit portions of the country.
The Standard & Poor’s/Case-Shiller index showed Tuesday that prices increased in August from July in 10 of the 20 cities tracked. That marked the fifth straight month that at least half of the cities in the survey showed monthly gains.
The biggest price increases were in Washington, Chicago and Detroit. The greatest declines were in Atlanta and Los Angeles.
The August data provides a “modest glimmer of hope” that some areas may have bottomed out and could be turning around, said David M. Blitzer, chairman of S&P’s index committee. He noted that cities in the Midwest — Chicago, Detroit and Minneapolis — have shown some strength since May.
Still, Robert Shiller, the co-founder of the index and a Yale economics professor, said in an interview on CNBC that overall home prices were “flat” and a recovery in the struggling housing market was not on the horizon.
Over the past 12 months, prices have fallen in all but two cities. Detroit and Washington were the only two cities to show year-over-year gains.
The index, which covers half of all U.S. homes, measures prices compared with those in January 2000 and creates a three-month moving average. The August data are the latest available.
“We certainly believe the bulk of the decline in housing is behind us and indeed, one might even say that ‘housing’ is more likely to improve from here,” said Dan Greenhaus, chief global strategist for BTIG. “But given the overwhelming level of inventory that remains on the market … further price declines seem almost assured to help clear the market.”
Prices are certain to fall again once banks resume millions of foreclosures that have been delayed because of a yearlong government investigation into mortgage lending practices.
Those homes at risk of foreclosure promise “to keep pressure on prices for some time,” said Joshua Shapiro, chief U.S. economist at MFR Inc.
Home prices have stabilized in coastal cities over the past six months, helped by a rush of spring buyers and investors. But this year, home prices in many cities, including Cleveland, Detroit, Las Vegas, Phoenix and Tampa, have reached their lowest points since the housing bust more than four years ago.
Many people are reluctant to purchase a home more than two years after the recession officially ended. Even the lowest mortgage rates in history haven’t been enough to lift sales.
Some can’t qualify for loans or meet higher down payment requirements. Many with good credit and stable jobs are holding off because they fear that home prices will keep falling.
Sales of previously occupied home sales are on pace to match last year’s dismal figures — the worst in 13 years. Sales of new homes fell to a six-month low in August and this year could be the worst since the government began keeping records a half century ago.
Foreclosures and short sales — when a lender accepts less for a home than what is owed on a mortgage — makes up about 30 percent of all home sales last month, up from about 10 percent in past years. The large number of unsold homes and foreclosures are sending prices lower and hurting sales.