Prices of single-family homes snapped eight straight months of declines in April, according to a closely watched report released Tuesday. But that was not enough to convince economists that the housing market is beginning to recover.
The Standard & Poor’s Case-Shiller index reported that single-family-home prices rose 0.7 percent in April, the beginning of the traditional spring-summer home-buying season. The seasonal boost lifted prices from “a new crisis low” reflected in March’s numbers, the report said. Last month, the 20-city home price index reached its lowest level since 2009, recording a “double dip” in the housing market, as values fell below where they were when the market collapsed.
But David Blitzer, chairman of the S&P’s index committee, warned that, with April’s prices still down 4 percent from their levels during the same period a year ago, “it is much too early to tell if this is a turning point or simply due to some warmer weather.”
S&P economists focus on data that have not been seasonally adjusted. In excluding certain factors, however, such as the spring-summer home-buying season, home prices fell 0.1 percent in April compared with March.
Prices in the Washington region were up 3 percent from March to April and 4 percent over the past year.
Economist Patrick Newport predicted that home prices will drop 5 percent more before beginning to recover in the first half of next year. “At some point, they can’t continue to drop because they’re so undervalued in some places,” said Newport, who works for consulting firm IHS Global Insight in Lexington, Mass.
Charlotte, Chicago, Detroit, Las Vegas, Miami and Tampa fell to new index lows in April, while Washington continued to post strong increases in home prices.
“What really will matter is what happens to job growth in those cities, and that’s probably why D.C. is better than most cities,” Newport said. Although the Washington region’s 9.8 percent unemployment rate remains above the national rate of 9.1 percent, hiring by the federal government has helped cushion the area from the steeper unemployment rates reported in other cities.
A “huge overhang of foreclosures” is also depressing prices, said Ken Mayland, an economic forecaster with Ohio-based ClearView Economics. “That’s going to exert more downward pressure on the prices, and that’s why I don’t think [Case-Shiller] is saying much about the macro economy.”