Instant View: Home prices dip 0.2 pct in November

NEW YORK (BestGrowthStock) – U.S. home prices slipped in November and were softer than expected in the latest sign that a rebound in the U.S. housing market is tenuous, according to Standard & Poor’s/Case-Shiller indexes on Tuesday.

KEY POINTS: * The S&P composite index of home prices in 20 metropolitan areas slipped 0.2 percent in November after a revised 0.1 percent October dip, for a 5.3 percent annual drop. * A Reuters survey had forecast a 0.1 percent November rise. * Prices were originally reported as unchanged in October. * On a seasonally adjusted basis, the 20-city index rose 0.2 percent in November, S&P said, after a 0.3 percent rise the prior month. * Other markets continue to improve month over month, with Los Angeles, Phoenix, San Diego and San Francisco posting price rises for at least six consecutive months.

COMMENTS:

SUVRAT PRAKASH, US INTEREST RATE STRATEGIST, BNP PARIBAS, NEW

YORK:

“Up until a while ago it looked like home prices might have bottomed. A lot of people had that sense. But the last two months has put that all into question. There might be a double dip in home prices, which could feed through to the rest of the economy in the form of a double dip period of weakness at least in the housing sector.

“The pattern, after today’s number, doesn’t look good. There are still a lot of challenges for the housing market.”

DAVID SLOAN, ECONOMIST, 4CAST LTD, NEW YORK:

“No big surprises. This is November data and in December existing home sales fell sharply but house prices were quite strong. I think home prices will keep rising even as the effect of first time-home buyer credit fades.”

ANNA PIRETTI, SENIOR U.S. ECONOMIST, BNP PARIBAS, NEW YORK:

“It’s slightly less than the markets were looking for. I think overall the momentum is still positive but clearly at a slower pace than we got over the summer. Obviously there’s still some weakness over the 20 cities, but the cities that are still seeing weakness are recording smaller and smaller price declines.

“We’re estimating that about 50 percent of the home sales were boosted by the first time home buyer tax credit. Clearly that also supported prices.

“There’s a couple things we have to keep in perspective actually. The December existing home sales number is also backward looking. The Case-Shiller is backward looking and it actually reflects sales prices over the past three months to November so we’re really looking at the fall, not the winter, and that’s when we had a surge in home sales. Overall we had positive demand conditions and a market that was very well supported by the government program. As soon as that government program showed signs of ending buyers pulled back. The demand is not self-sustaining. I think overall the risks are still slightly to the downside.”

PETER KENNY, MANAGING DIRECTOR, KNIGHT EQUITY MARKETS, JERSEY

CITY, NEW JERSEY:

“The data was pretty much in line and should have no real impact on the market this morning. Certainly not on the futures. What it does speak to is further stabilization in a market that is in need of just that. It speaks to stabilization in housing, and that is, bottom line, an absolute requirement for the market to move higher.”

MARKET REACTION: STOCKS: U.S. stock index futures dip after weaker-than-expected S&P/Case-Shiller data. BONDS: U.S. Treasury debt prices steady at higher levels after data. DOLLAR: U.S. dollar extends gains versus euro after data.

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Instant View: Home prices dip 0.2 pct in November