S&P/Case-Shiller weighs in with August home prices

U.S. home prices appear have to scraped a bottom, with a leading national index showing three consecutive months of gains this summer. The Standard & Poor’s/Case-Shiller index of home prices in 20 metropolitan areas showed a 1% increase in the seasonally adjusted median price of homes from July to August. The index has posted month-to-month gains since June.

Housing market analysts cited the federal government’s $8,000 federal tax credit for first-time buyers as an important factor in the housing market’s recovery of late. The credit applies to home sales that close through Nov. 30 and is part of the $787-billion federal stimulus package enacted in February.Larson of Weiss Research said that while the credit played an important role, the most significant factor driving the housing market was the relative affordability of homes.’The real question is what happens now,’ he said. ‘You are going to see some give-back, you are probably going to see a pause in the recovery. But I think the fundamental story is that housing got way too expensive and now you could argue that housing is cheap again and that is what it boils down to in 50 words or less.’

Los Angeles area prices in August improved 1.3% over July on a seasonally adjusted basis. The median price was down 12% when compared to the same month a year earlier. Home prices in San Diego rose 1.5% on a seasonal basis from July but fell 8.9% when compared to August 2008.