New lows in home prices 'almost assured': Radar Logic
Home prices in May dropped 5.9% from the year before but gained 1.2% from the previous month, according to the RPX Composite Price index from analytics firm Radar Logic. The annual drop is the steepest since September 2009. Radar Logic said the monthly gain barely offsets the declines seen earlier in the year. "Home prices usually increase in the spring due to seasonal factors, and the bulk of the gains typically occur by May," Radar Logic said. "The lackluster performance of the RPX Composite Price to date means that we are almost assured to see new post-bust lows in the fall, when seasonal strength comes to an end and softening demand pulls housing prices downward." Because of the new lows, analysts at the firm predicted more homeowners will become underwater on their mortgage than the already 10.9 million and thus more foreclosures are bound to occur. The largest declines in May came in cities in the West and Midwest. Prices fell 14.7% in Seattle, followed by 11.9% in Sacramento, Calif., and 11.6% in Milwaukee. The smallest dip came in New York, at 0.4%, followed by a 1.1% drop in Charlotte, N.C., and a 4.6% decline in Washington. Write to Jon Prior. Follow him on Twitter @JonAPrior.