Summer home price gains fall short of winter declines
Home prices gained 4.1% in the second quarter from the previous period but the summer growth was not enough to bounce back to levels measured one year ago, according to the data provider Clear Capital. June home prices remain down 7.9% from June 2010, 1.8% lower from June 2009 and even down 1% from January. Last month, Clear Capital said it expected another 2.4% in declines in the second half of 2011. There were encouraging signs, however. All four U.S. regions posted quarterly gains in the second quarter led by a 6.3% increase in the Midwest. It's the first time all four regions posted a gain without a tax-credit stimulus since 2006. "Building off last month’s minimal quarterly gains, prices continue to correct from winter’s extended declines," said Alex Villacorta, director of research and analytics at Clear Capital. "Although this is encouraging, many markets are still near, or at record lows as REO saturation remains a significant proportion of all sales activity." The REO share of the existing housing inventory, or saturation rate, in the U.S. dropped 5.7% from the previous quarter to 28% as of the end of June. On the metro level, however, REO saturation diverges. In the 15 highest-performing markets, REO saturation fell to 22.7% but increased to roughly one-third of the lower 15 markets. "This second consecutive month of price gains is encouraging because it has allowed markets to recover most of the losses experienced in the first quarter of 2011, and occurred without the aid any of the federal incentives like those provided in 2009 and 2010," Clear Capital said. Write to Jon Prior. Follow him on Twitter @JonAPrior.