Case-Shiller Index Shows Prices Rise in September
The Case-Shiller index, which covers home values in the nation’s 20 largest cities, was released on Wednesday. The index showed prices in those cities rose 1.7 percent in September, compared with August, and also indicated the smallest yearly gain for the index since February. The measure remains a staggering 28 percent below the peak levels of July 2006. 27 economists who participated in a recent survey conducted by Bloomberg had forecast a median gain of 2.1 percent.
The expiration of federal tax credits of as much as $8,000 back in April caused a severe downward trend in sales, which the market has yet to recover from. The decreased demand has, in turn, kept downward pressure on prices. Meanwhile, record numbers of foreclosed properties continue to enter the market as continued high levels of unemployment continue to hinder sales. All this leads to a diminished role for housing in the recovery of the overall economy.
The tax credits did their job by temporarily lifting the housing market through the end of 2009 and the beginning of this year. The original deadline for homebuyers to sign contracts in order to qualify for the credits was November 30th, and sales of existing homes that month, consequently, reached a 34-month high, figures from the National Association of Realtors show.