August 2009

The S&P/Case-Shiller home price indexes were released this morning, showing that home prices rose for the fourth month in a row and suffered only a small annual drop.

After climbing 1.6% in July, home prices took another 1.2% step forward in August.  Though prices were down 11.3% from August 2008, analysts had predicted an 11.9% drop and were thus somewhat relieved. “Broadly speaking, the rate of annual decline in home price values continues to improve,” said David Blitzer, chairman of at Standard & Poor’s index committee. The annual rate of decline of the 10-City and 20-City Composites has improved for seven consecutive months.

Dallas home prices experienced a 0.2% increase from July to August, and a 1.2% decline from August 2008.

Some economists predict that home prices will soon take another dip, especially if the tax credit ends in late November. “Once the tax credit expires, demand will take a hit, home sales will drop and house prices will resume their downward course, brought down by the weight of rising foreclosures and rising unemployment rates,” writes Patrick Newport, an economist at IHS Global Insight.. “Our view is that home prices will drop another 5%….and will bottom in 2010.”

Though the future is still unknown, today’s report indicates a small step in the right direction.