US Home Prices Drift Lower

By
November 29, 2011
Share:

Housing prices are tracking the economy closely, remaining sluggish.

 

U.S. home prices in many cities drifted lower in September, struggling to find the footing to stage a recovery amid a continued economic weakness, the latest S&P/Case Shiller report showed.

Earlier this year, the housing market retested lows not seen since the market bottomed in early 2009, then bounced just enough to allude to a potential recovery.

But as the months progressed, it has become clearer that a housing recovery is elusive at best, and any strength seen in recent months has been merely a result of seasonal factors that tend to boost demand for housing during the summer.

The 10-City and 20-City Composite Home Price Indexes in September dropped 3.3 percent and 3.6 percent from their September 2010 readings, respectively, and prices in all but two cities surveyed remained below year-ago levels.

All in all, the market remains mired by sluggish demand, high unemployment rates, large inventory of homes and tight availability of credit, with prices across the U.S. largely back to where they were in early 2003.

“Over the last year, home prices in most cities drifted lower,” S&P Chairman of the Index Committee David Blitzer said in the report. “It is disturbing that we saw three cities post new crisis lows.”

“The plunging collapse of prices seen in 2007-2009 seems to be behind us,” Blitzer added. “Any chance for a sustained recovery will probably need a stronger economy.”

A Closer Look

As noted, homes in all but two cities surveyed were still cheaper than year-ago levels.

While Washington, D.C. and Detroit saw prices climb 1 percent and 3.7 percent on the year, respectively, the other 18 cities tracked in the data series remained in the red, and some of them slid to new lows.

Still, there were roses among the thorns. In as many as 14 cities, the hole seemed to be getting shallower, with prices managing to improve a notch while still remaining lower on the year, Blitzer noted.

The latest data series also included a quarterly survey, which showed the U.S. National Home Price Index was nearly 4 percent below year-ago levels despite its 0.1 percent gains in the third quarter, compared with its previous quarter. The quarterly survey covers all nine U.S. census divisions.

 

ETF.COM CHANNELS

Want to learn more about smart-beta ETFs? Check out our smart-beta guide, essentials library and ETF screener!

ETF DAILY DATA

REIT fund 'VNQ' topped net creations Thursday, July 30, with inflows of $313 million. The least popular ETF of the day was small-cap 'IWM', which lost about 1.6% of its total assets.

'SPY' and 'DIA' paced State Street's issuer-leading inflows Thursday, July 30. Total U.S.-listed ETF assets ended the day at $2.141 trillion.

ETF.COM ANALYST BLOGS

By Matt Hougan

The median ETF tracks its index perfectly excluding expenses. But different firms and funds perform quite differently.

By Paul Britt

Toss and turn about whether to hedge currency risk, but don’t lose sleep over the derivatives themselves.

By Dave Nadig

With the China A-share market half-broken, ETF investors should be very, very cautious.

By Drew Voros

Price depreciation and continued outflows have made for a tough few years.

ETF INDUSTRY PERSPECTIVE

By Invesco PowerShares

A more in-depth look at the smart-beta survey's results.

By Invesco PowerShares

Smart beta appears to be poised for further growth.