House Prices Show Signs of Stabilizing

Washington, DC, Aug. 11, 2010--The trend in firming home prices solidified in the second quarter with more metropolitan areas showing increases from a year ago, according to the latest survey by the National Association of Realtors.

In the second quarter, 100 out of 155 metropolitan statistical areas had higher median existing single-family home prices in comparison with the second quarter of 2009, including 14 with double-digit increases; two were unchanged and 53 metros showed price declines.

In the first quarter of this year 91 areas had higher prices, while only 26 MSAs experienced annual price gains in second quarter of 2009.

The national median existing single-family price was $176,900 in the second quarter, up 1.5% from $174,200 in the same period of 2009.

Lawrence Yun, NAR chief economist, said the correction in home prices appears to have ended in 2009.

“All year we’ve been seeing relatively flat national home prices, which appear to be supported by market fundamentals,” he said.

“Prices in some areas remain below replacement construction costs, so even with an elevated supply of existing homes on the market we don’t expect any consequential movement in home prices for the foreseeable future. Very low inventory of newly built homes also will help to support home values.”

Total existing-home sales, including single-family and condo, rose 9.1% to a seasonally adjusted annual rate of 5.61 million in the second quarter from 5.14 million in the first quarter, and were 17.3% above the 4.78 million-unit pace in the second quarter of 2009.