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US home prices dip as market weakens
Source: Agencies |
May 26, 2010, Wednesday
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HOME prices in the United States fell in March from the previous month, a sign of a weakening housing market despite historically low mortgage rates and now-expired tax credits.
The Standard & Poor's/Case-Shiller 20-city home price index released yesterday posted a 0.5 percent drop from February.
Prices in 13 of the 20 cities tracked by the index fell month over month. Only six metro areas recorded price gains. One, Boston, came in flat.
On Monday the National Association of Realtors reported that sales of previously occupied homes rose 7.6 percent in April, boosted by the low mortgage rates and government incentives. But the improvements aren't likely to last as the tax credit expired on April 30.
In a healthier economy, extraordinarily low mortgage rates would pump up demand for homes. But economists say the job market is too weak and credit is too tight.
In yesterday's report, Detroit and Chicago saw the largest monthly declines at 4.1 percent and 2.3 percent, respectively. Cleveland enjoyed the biggest gain at 1.8 percent.
The numbers are especially disturbing because they show that improved sales due to the tax credits didn't translate into higher prices, said David M. Blitzer, chairman of the S&P index committee.
New buyers were offered a credit worth up to US$8,000, while current owners who bought and moved into another home could get one for up to US$6,500. To receive them, buyers had to have a signed offer by April 30 and must close by the end of June.
"When you look at recent trends, there are signs of renewed weakening in home prices," Blitzer said in a statement.
This is discouraging for American homeowners who have seen the value of their largest asset shrink sharply over the last three years.
The Standard & Poor's/Case-Shiller 20-city home price index released yesterday posted a 0.5 percent drop from February.
Prices in 13 of the 20 cities tracked by the index fell month over month. Only six metro areas recorded price gains. One, Boston, came in flat.
On Monday the National Association of Realtors reported that sales of previously occupied homes rose 7.6 percent in April, boosted by the low mortgage rates and government incentives. But the improvements aren't likely to last as the tax credit expired on April 30.
In a healthier economy, extraordinarily low mortgage rates would pump up demand for homes. But economists say the job market is too weak and credit is too tight.
In yesterday's report, Detroit and Chicago saw the largest monthly declines at 4.1 percent and 2.3 percent, respectively. Cleveland enjoyed the biggest gain at 1.8 percent.
The numbers are especially disturbing because they show that improved sales due to the tax credits didn't translate into higher prices, said David M. Blitzer, chairman of the S&P index committee.
New buyers were offered a credit worth up to US$8,000, while current owners who bought and moved into another home could get one for up to US$6,500. To receive them, buyers had to have a signed offer by April 30 and must close by the end of June.
"When you look at recent trends, there are signs of renewed weakening in home prices," Blitzer said in a statement.
This is discouraging for American homeowners who have seen the value of their largest asset shrink sharply over the last three years.
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