U.S. home prices appear to have turned a corner this spring after a year’s worth of declines, but whether the housing market has truly bottomed out remains to be seen.
The Federal Housing Finance Agency said today that prices rose by 0.4 percent nationwide in May, which follows a slight uptick reported in April by multiple research firms. As of the end of May, home prices had fallen by 6.3 percent over the 12 months prior and stood at 19.6 percent below their April 2007 peak — approximately even with home prices from January 2004.
The FHFA’s numbers show a 0.2 percent increase in home prices in April, so it’s possible that the gradual acceleration in the May data could indicate the beginning of the end of the bleeding for U.S housing. However, analysts often note that housing data tends to improve only temporarily during the spring homebuying season.
As David Blitzer, chairman of the Index Committee at Standard & Poor’s, noted last month when the Case-Shiller Home Price Index for April showed modest gains, “it is much too early to tell if this is a turning point or simply due to some warmer weather.” — Sarabeth Sanders