(Bloomberg News) Residential real estate prices in the U.S. decreased in the year ended in June at a slower pace than in the prior month, a sign the market may be stabilizing.
The S&P/Case-Shiller index of property values in 20 cities fell 4.5 percent from June 2010, after a 4.6 percent drop in the 12 months ended May that was the biggest since 2009, the group said today in New York. The median forecast of 31 economists surveyed by Bloomberg News projected a 4.6 percent decline.
Values fell by 0.1 percent in June from the prior month after adjusted for seasonal changes, matching the decrease in May, indicating the deterioration is slowing. Nonetheless, any recovery in home values is probably years away as foreclosures dump more properties onto to the market, while a jobless rate hovering around 9 percent and strict lending rules hurt sales.
"Prices aren't going to rebound back rapidly," said Paul Dales, a senior U.S. economist at Capital Economics Ltd. in Toronto. "Most people think that when the downturn ends the recovery will be pretty good, but that's not going to be the case at all."
Another report today showed consumer confidence plunged in August by the most since October 2008 as Americans grew more concerned about job prospects. The New York-based Conference Board's gauge dropped to 44.5, the lowest reading since April 2009, when the economy was in a recession, the private research group said.
Stocks fell amid concern the recent rally had gone too far given the U.S. economic outlook. The Standard & Poor's 500 Index fell 0.9 percent to 1,199.22 at 10:03 a.m. in New York. Treasury securities rose, sending the yield on the benchmark 10-year note down to 2.17 percent from 2.26 percent late yesterday.
Estimates for the price change from June 2010 ranged from declines of 4 percent to 5.5 percent, according to the Bloomberg survey. The Case-Shiller measure is based on a three-month average, which means the June data was influenced by transactions in May and April.
The year-over-year drop in May was the biggest in 18 months.
Nationally, prices decreased 5.9 percent in the second quarter from the same time in 2010. They increased 3.6 percent from the previous three months before seasonal adjustment and climbed 0.1 percent after taking those changes into account. Property values in the first quarter dropped to the lowest level in almost nine years.