Every month, S&P and Case-Shiller release data on home prices. They have indices that track what home prices are doing in major cities around the country. The group's 20-city index showed ...
* Home prices fell 0.39% between May and June. That was up from a 0.27% fall in May and the sharpest one-month decline since January (when prices slipped 0.5%).
* On a year-over-year basis, home prices fell by 3.49% in June. That was a sharper decline than the 2.88% fall we saw in May. It is also the worst reading yet in this down cycle.
* Of the 20 cities in the composite index, 15 out of 20 showed a YOY
price drop (the same as in May
). Detroit showed the sharpest decline (-11.01%), followed by Tampa (-7.7%), San Diego (-7.3%), and Washington, D.C. (-6.96%). The country's strongest upside performer was Seattle (+7.94%). Next in line were the cities of Charlotte (+6.78%) and Portland (+4.52%).
* A separate quarterly index
showed a 3.2% decline in the second quarter, the sharpest decline on record (this data series goes back to 1987).
Like I said yesterday
, it really is a supply story in the housing market. We have way too many homes for sale given the current level of demand. Just take a look at this chart. It shows a 25-year history of existing, single-family home, for-sale inventory.
As of July, there were 3.85 million units on the market. That compares with an average of around 2.2 million units during the reference period and a previous peak of 3.04 million units in April 1986. Is it any wonder home prices are slumping?