July’s home price data has shown us four consecutive months of increasing home prices. According to the S&P/Case-Shiller 20-city home price index, home prices rose by an average of 0.6% in the 20 cities monitored from June to July. The index also shows that home prices were up 3.2% in July when compared to the previous year; a trend that should note consideration in an industry where sales shift drastically depending on the month of the year.
Although there was an overall increase of 0.6% for the month when compared with the previous month, the S&P/Case-Shiller 20-city home price index reported that not all 20 cities are improving as far as home prices are concerned. Half of the housing markets surveyed reported a decline in housing prices for their perspective markets for July when compared to the same month the previous year.
We might be tired of hearing about this; still, the expiration of the federal tax credit for home buyers had a significant effect on home prices. The tax credit buoyed home prices for months. Now that the credit has expired, sales have slid and eventually that will lead to the inevitable decline in home values. Have we hit the bottom yet? According to a survey conducted by MacroMarkets LLC of 114 economists and housing analysts, home prices are expected to fall by another 2.2% this year. That is alarming news when so many home owners across the nation already owe more on their home than the property is worth.
According to CoreLogic Inc., a real estate analytic firm, there is an estimated 11 million home owners that are underwater on their home loans, meaning that they own more that their home is worth. That number will increase by another 2.5 million if home prices decline another 5%. This shows how direct the correlation between home prices and economic stability are.
Bryan is a member of New Homes Section and a proud contributor to its blogging network. 
These are shocking reports. I think it will be some time before things start to pickup again in the property market. It’s almost a case of as soon as things look like they’re on the up something comes along and knocks it all back down again.
Thanks for the informative article.
The expiration of the Federal Tax Credit for first-time and existing homebuyers has been detrimental to home sales in many markets across the United States.
The decline in sales was far more substantial than economists predicted. Many markets were hit with a decline as much as 25% to 30% in home sales, often twice their expected drop.
I don’t think the prices is not going down more, the market has slowly stabilized and get to the bottom, now its going to slowly starting rise.