The Case-Shiller housing index continues to show early signs of a bottoming process. The Comp-20 index dropped 15.92% year-over-year in June, the smallest acceleration so far this year. The index’s month-over-month rate of decline also decelerated, to -0.50% from a peak of -2.65% in February.
What do we mean by “early signs of a bottoming process”? We do NOT mean that housing prices are about to stop falling. They aren’t: In fact, they’ll probably eventually fall as far from here as they have already.
We mean that the year-over-year rate of decline in house prices is finally beginning to peak, after accelerating markedly every month earlier in the year. One the rate of decline peaks, which will likely happen next month, each successive monthly year over year decline should be less than the prior month. And the month-to-month change should soon stabilise and become subject to seasonal factors.
The housing crisis is far from over. But the rate at which it is getting worse is finally moderating. This should help Wall Street and homeowners get a better fix on where and when the bottom will likely be.
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