WASHINGTON – The market value of U.S. homes rose by a seasonally adjusted 0.3 percent in July compared with June, the third monthly increase this year, the Federal Housing Finance Agency reported Tuesday.
June’s price increase was revised lower to a 0.1 percent gain, down from 0.5 percent previously reported. After the revision, July’s price level was the same as that initially reported for June. Prices are essentially flat since the beginning of the year.
Prices for the latest month fell 4.2 percent compared with July 2008 and were down 10.5 percent from the peak in April 2007, the FHFA’s statistics showed. Prices in July were at the same level as March 2005.
“We’re a bit distrustful of the stabilization in home prices given the large inventory of unsold, unoccupied units hanging around,” wrote economists for Goldman Sachs. The tax credit for first-time home buyers and the residual effects of the moratorium on foreclosures earlier could be propping prices up, they said.
Prices for July rose in five of nine regions, led by a 1.6 percent gain in the Pacific states – defined as Hawaii, Alaska, Washington, Oregon and California – where prices have fallen 9 percent in the past year.
The Mountain states – Montana, Idaho, Wyoming, Nevada, Utah, Colorado, Arizona and New Mexico – are now the region with the largest year-over-year decline, at 9.8 percent.
Only one region has seen prices rise over the past year: the West South Central states of Oklahoma, Arkansas, Texas and Louisiana, where prices are up 0.1 percent.
The biggest monthly drop in July was 0.9 percent and came in the East South Central states of Kentucky, Tennessee, Mississippi and Alabama.
The FHFA index is based on repeat sales financed through Fannie Mae or Freddie Mac.
Other indexes of home prices underscore that prices may have stabilized in the past few months after an historic drop in 2007 and 2008.
The separate Loan Performance index rose 0.4 percent in July after falling 6.8 percent over the past year. The Loan Performance index is up 1.6 percent since January.
The Federal Reserve uses the Loan Performance index to help determine household wealth, which rose by $2 billion in the second quarter, including a $323.4 billion increase in real estate wealth.
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