Two weeks before Standard & Poor’s releases its Case/Shiller Home Price Indices for July, there may still be no signs of a rise in prices in the 20-City Composite Index. The listing declined by 0.9 percent MoM plunging to -15.8 percent in May. The 10-City Composite Index meanwhile went further down by 1.0 percent MoM to -16.9 percent. The prices reflect the distress in the housing market with overflowing listings of homes available to buyers with a much lower consumer confidence for more than a year.
The bland housing market saw drops in MoM changes in Chicago, Cleveland, Detroit, Las Vegas, Los Angeles, Miami, New York, Phoenix, San Diego, San Francisco, Seattle, Tampa and Washington. Miami experienced the largest drop with -3.6 percent due to higher inflation rates and underwriting cautions.
Minimal positive rates were recorded for Atlanta, Boston, Charlotte, Dallas, Denver, Minneapolis and Portland with changes from 0.4 to 1.0 percent only. However, selling in a much tighter lending period proves that these cities have fairly done well after all. On a bad note, all twenty cities posted YoY drops with Las Vegas, Miami and Phoenix down by more than 25 percent.
This month, the housing crisis isn’t taming down yet. When sellers beat the market slump by offering competitive lower prices ahead of the market to hedge further sales slips, consumer confidence is however highly affected by the losses in sub-prime mortgage markets and bankruptcies in a number of financial institutions. The government’s current intervention to correct the market has the aim of restoring consumer confidence, the result of which will be partially reflected not in S&P’s data this month but once the bail out of the GSEs is fully on the way.