This morning Case-Shiller released a report showing the largest price increase in the American residential property since August 2006. Prices for April 2010 in the broad Composite 20 index were up 3.9% year-on-year while prices in the Composite-10 are up 4.7 in the prior twelve months. Digging deeper into the non-seasonally adjusted data, 17 of 20 markets showed a month-to-month price increase while 13 of 20 markets show year-on-year increases.
Many pundits point to the expiration of the homebuyer tax credit as the reason for the increase. However, we did see that both existing and new home sales were depressed in May despite the tax credit expiration. I look at the data as reflective of the usual buoyancy associated with the prime spring and summer house selling season.
Note: originally, the post read that the home sales data was for April. Rather, it was for May, the next month after which contracts must have been signed to receive the tax credit. Many deals should still have been valid in May as deals must close by today for the tax credit to count for contracts signed before April 30th.