Reports show little evidence of housing rebound

12:00 AM evidence, housing, little, rebound, reports No Comments

By John W. Schoen, Senior Producer
Hopes may be fading for a long-awaited spring rebound in the U.S. housing market.

Two widely watched benchmarks Tuesday signaled that the pace of sales softened and prices fell last month. And a prominent housing economist warned that the market may not stage a major turnaround “in our lifetimes.”

Falling home price were recorded in 20 cities tracked by the Standard & Poor's/Case-Shiller home price index. Prices in the 20 cities fell 3.5 percent year over year, moderating from the previous month's decline of 3.8 percent.

The composite index of 20 cities gained 0.2 percent in February on a seasonally adjusted basis, matching economists' forecasts. But overall, the trend of falling prices has yet to reverse course, according to Maureen Maitland, a Standard & Poor's vice president.

“Some of the annual rates of change are improving,” she told CNBC. “But they're still largely negative. There are very few markets that are seeing positive annual rates of change, and very few rose on a month-over-month basis. So I wouldn't say there were very many bright spots.”

Seven of the cities tracked by the index saw prices drop on a seasonally adjusted basis, while prices in two cities were unchanged. On an unadjusted basis, 16 of the areas slumped further.

Home prices continue to slip as demand remains weak. In a separate report, sales of new single-family home sales dropped in March to their lowest level in four months, but the reading still beat analysts' expectations as the government said sales in prior months were higher than initially thought.

The Commerce Department said sales slipped 7.1 percent in March to a seasonally adjusted annual rate of 328,000 units.

February's sales pace was revised higher to 353,000 units, the fastest pace since November 2009, from the previously reported 313,000 units. Sales for December and January were also revised higher.

Economists polled by Reuters had forecast sales at a 320,000-unit rate in March. The median price for a new home fell 1 percent to $234,500. However, compared to March 2011, the median price was up 6.3 percent.

The National Association of Realtors said Thursday that home resales fell in March, but prices inched higher from a year earlier.

Maitland said the latest data confirm that the housing market has yet to shake off lingering effects of the worst collapse since the 1930s.

“The housing market is still really very low,” she said. “Housing starts, home sales, our numbers are at cycle lows. They're really not showing any turn around at all.”

CNBC's David Faber discusse the Standard & Poor's/Case-Shiller home price data for February, with Maureen Maitland, S&P Indices vice president.

Yale economics professor Robert Shiller told Reuters Insider that a weak labor market, high gasoline prices and a general sense of unease among consumers was outweighing low mortgage rates and would likely keep a lid on prices for the foreseeable future.

"I worry that we might not see a really major turnaround in our lifetimes," said Shiller, who co-created the Case-Shiller index.

He said suburban areas in particular might endure further price declines as high gas prices increase demand for "walkable cities."