Despite 3.6% Increase, Home Prices are Still Stuck At Levels Seen in ’03

The U.S. National Home Price Index (HPI) increased 3.6% in the second quarter of 2011, recovering somewhat from its first-quarter low, the S&P/Case Shiller Home Price Indices reported today. Average home prices across the nation are back to their early 2003 levels.

Despite the upward trend, the National Index is still posting an annual decline of 5.9% compared to the same period in 2010, not helped by Q1 2011’s 4.1% drop.

From May to June, 19 out of the 20 metropolitan statistical areas (MSAs) covered by Case Shiller’s HPI were up, with Portland remaining flat. However, while both monthly composites were up, all MSAs were down compared to June 2010.

Still, 12 of the MSAs and both composites have increased three months in a row, which signals seasonal strength in the housing market, says Case Shiller.

“This month’s report showed mixed signals for recovery in home prices. No cities made new lows in June 2011, and the majority of cities are seeing improved annual rates,” said David M. Blitzer, chairman of the Index Committee at S&P Indices.

The shift in which markets bottomed out, and when, suggests a return to regional housing markets, as opposed to national, where everything “rose and fell together,” Blitzer added.


Chicago and Minneapolis posted the greatest growth from May to June, both at 3.2%, followed by Boston, at 2.4%, and Washington, at 2.3%. All four of these cities have experienced negative growth compared to the same quarter 2010, however, and Chicago and Minneapolis have declined significantly, at 7.4% and 10.8%, respectively. Portland’s HPI, which remained neutral in the quarter, is 9.6% below last year’s levels.

The four Sunbelt cities, Las Vegas, Miami, Phoenix, and Tampa, all set new lows in 2011, but experienced modest upticks in the quarter, ranging from 0.1% to 0.6%.

Written by Alyssa Gerace

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