In June, home prices were down 5.9 percent from a year ago, according to the Federal Housing Finance Authority.
But the average price was up 0.9 percent month-over-month in June, topping the 0.4 percent gain registered in May.
Prices have now fallen 18.8 percent from the 2007 top. The latest report was the 15th decline in the last 17 quarters. After such a steep and sustained decline, it looks like recent data show that prices have stopped plummeting, and seem to be finding a bottom.
Another disappointing piece of economic news came from the revision to GDP in the second quarter. As a whole, the nation’s economy grew by only 1 percent in the quarter. But digging into the data, we see that this report also held good news for home prices.
The price inflator for residential property was up by 2.1 percent in the quarter, its fourth consecutive quarterly gain.
A large number of homes in the foreclosure process will continue to be a drag on prices. That means home prices aren’t likely to shoot higher from current levels.
But they also seem unlikely to fall much lower. A bottom could take time to form, but the worst of this four-year bear market seems to be behind us.
Prices now sit where they were in 2004. This is the level where the bubble took hold and double digit gains became normal in housing markets. From the perspective of a technical analyst, having completely retraced the bubble, prices should be at a bottom.
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