The Case-Shiller Comp-20 index fell 15.8% year-over-year, the largest year-over-year drop on record and an acceleration from last month’s decline. However, the month-to-month sequential drop slowed to 0.9%, (versus 1.4% last month), and the rate of acceleration in the year-over-year figures moderated. This suggests that declines may on the verge of decelerating, which is the first stage of bottoming. Also good news: prices in 7 of the 20 major metropolitan areas rose sequentially, three of them for the third consecutive month. (All regions fell year-over-year).
Prices will obviously continue to decline for many months and possibly a year or more. But it is possible that May will be the last month in which the year-over-year rate of decline accelerates. A small positive, certainly, but the best news on the housing market we’ve had in about a year.
This improved news follows an encouraging report on New Home Sales last Friday.
Case-Shiller’s reading on house prices in April showed the largest year-over-year drop in the index on record. Prices fell 15.3%, marking an acceleration from the previous month’s 14.3% drop. The drop was 1.4% month-over-month.
Some analysts were excited by the fact that the month-to-month rate of decline slowed. Others withheld optimism for the day the annualized rates began showing some moderation. Will May be the month the year-over-year decline finally decelerates? Check back at 9AM ET.
The WSJ released its own survey of housing data and inventories this morning, indicating that inventories have finally begun to drop in some markets. The survey also revealed how drastically markets differ from region to region. In Las Vegas, for example, an astounding 61% of homes bought since 2003 have negative equity. 15.8 16.9
A real and sustainable economic recovery can’t begin until housing markets remedy these issues. Stay tuned for the release at 9:00 AM Eastern.