Rising home prices offer a ‘glimmer of hope’ for downtrodden market

There is a “modest glimmer of hope” in the housing market, as new data show cities nationwide slowly regaining home value lost over the last year.

The latest numbers from the Standard & Poor’s/Case-Shiller home price index found that the 20 cities tracked by the index experienced home-price gains of 0.2 percent in the month of August.

{mosads}While slight, it does help cut into the overall losses suffered in the housing market earlier in the year, as home values lag 3.8 percent lower than where they stood one year ago.

The optimistic findings come one day after President Obama announced a
fresh effort to help underwater homeowners — those who owe more on
their homes than they are worth — refinance their mortgages. The Federal
Housing Finance Agency, which regulates Fannie Mae and Freddie Mac,
announced Monday it was trimming some of the fees and requirements tied
to its underwater refinancing program, in an effort to entice more
struggling homeowners into it.

The Home Affordable Refinance
Program (HARP) was originally intended to help 3 million to 4 million
homeowners, but so far has reached fewer than a million. If more
homeowners jump into the now-relaxed initiative, it could lower mortgage
payments for many, freeing up money that could be pumped into
the laggard economy elsewhere.

Further boosting optimism is the fact that the rise in home prices is coming on the tail end of the spring and summer buying season — a potential indication that the positive momentum might not be just a flash in the pan. The latest report found home prices climbing for the fifth month in a row.

“In spring and summer’s seasonally strong period for housing demand, we cautioned that monthly increases in prices had to be paired with improvement in annual rates before anyone could declare that the market might be stabilizing,” said David M. Blitzer, chairman of the index committee at S&P Indices. “We see a modest glimmer of hope with these data.”

But while home prices on a nationwide average were on the upswing, actual results were more mixed when narrowed down to particular cities. Ten of the cities tracked reported declines in home prices, with Atlanta leading the way as values fell by 2.4 percent.

Another 10 cities saw gains in home prices — Detroit grew the most at 1.4 percent.

All told, 18 of the 20 cities analyzed by the index still have home values that fall below where they stood at the beginning of the year.