Home prices across the country increased in April from the previous month, breaking a trend of seven consecutive months of declines.
As the market enters its peak season for activity, property values rose 1.3 percent from March, according to the most recent Standard & Poor's/Case-Shiller Home Price Index. However, on a year-over-year basis, prices depreciated significantly.
The report's 10-city composite fell 2.2 percent from April 2011, while the 20-city composite dipped 1.9 percent during the same period. While these declines were notable, they were well below the drop in home prices seen in May on an annual basis, which could be a sign that property values are slowly starting to stabilize.
"With April 2012 data, we finally saw some rising home prices," said S&P index committee chairman David Blitzer. "On a monthly basis, 19 of the 20 MSAs and both composites rose in April over March."
Meanwhile, out of the 20 major metropolitan areas examined by the index, 18 reported annual price increases, while Detroit and New York experienced price declines. The Big Apple only experienced a marginal change, but property values in Detroit plummeted 3.6 percent from April 2011. In contrast, Boston, Charlotte, Dallas, Denver, Miami, Minneapolis, Phoenix, Tampa and Washington, D.C., all posted annual returns.
Despite the gains recorded in these metropolitan areas, many currently underwater homeowners are refusing to list their properties on the market, as to not take a loss on their investments. As a result, the existing-home inventory thinned to an estimated 2.4 million units in May, representing a 6.6-month supply. As a result of fewer options, more prospective buyers are opting to purchase new homes instead.
New single-family home sales increased 7.6 percent in May from the previous month, according to a report from the Department of Housing and Urban Development. This pushed the annualized sales rate of these properties to an estimated 369,000 units, which is a significant increase from a pace of 308,000 a year earlier. However, activity still remains well below where it was at the housing market's peak.
"The degree that new home sales has fallen is striking, from monthly rates nearly as high as 1.4 million at the peak of the housing stampede ... in 2005," analysts from Econoday told HousingWire.
Meanwhile, property data shows the upswing in sales last month caused the median price of new single-family homes to hit $234,500, while the average price reached $273,900.