Charlotte-area home prices rose in July for the fifth consecutive month, suggesting the housing market is grinding its way to a recovery.
Nationally, the S&P/Case-Shiller composite index of 20 cities shows U.S. single-family home prices rose 1.6 percent in July from June on a non-seasonally-adjusted basis. While all 20 cities have posted increases for three straight months, the gains reported Tuesday fell below expectations.
In Charlotte, home prices rose 0.9 percent in July from June and 2.2 percent from a year ago.
All in all, we are more optimistic about housing, said David Blitzer, chairman of the Index Committee at S&P Dow Jones Indices, which compiles the report. The news on home prices in this report confirm recent good news about housing. Upbeat trends continue.
The index gained 1.2 percent in July compared to the previous year. Overall, average home prices across the country are back to their summer 2003 levels, the index shows. They remain down about 30 percent from their summer 2006 peak.
The Case-Shiller report, while widely watched, lags two months. The index is one of the most precise measures of home values because it tracks repeat sales of houses. Like stock market indexes, Case-Shiller reflects changes in prices, not an actual price.
Pat Riley, president and chief operating officer of real estate firm Allen Tate, said rising prices are very predictable due to very high rents, low interest rates, and low inventories of great product.
Add in the new people moving into the region, and it all makes sense that prices will continue their gradual rise off the new reset, he said.
The weak housing market has delayed a broader economic recovery.
But rising home prices, along with an improving job market, helped boost consumer confidence in September to its highest level in seven months.
Home resales and groundbreaking for new homes also grew in August. Housing starts rose 2.3 percent last month, the fastest in more than two years.
Foreclosures and short sales are still weighing on the recovery, although they account for a smaller proportion of sales than last year.
Allen Tates Riley said a real recovery hasnt been able to take root until buyers felt confident that home prices had settled.
Buyers may be feeling more optimistic, he said.
We might not like what the new value is, but it wont go up until sales and comps start being entered , he said. The good news with the sales being up , most neighborhoods now know what the new pricing is and purchasers are moving forward.