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S&P Case Shiller: Home Prices Rose in May

But prices slipped slightly compared to last year


Homeowners looking to put their homes on the market received some good news this morning. Standard & Poor’s Case-Shiller home-price indexes for 10-cities and 20-cities each jumped 2.2% in May compared to April.

That marked the second consecutive monthly improvement in the indexes. Home prices moved upward by 1.3% in April after seven straight monthly declines, The Wall Street Journal noted.

Home Prices Rise, but Builders Look Frothy
Home Prices Rise, but Builders Look Frothy

Adjusted for seasonal variations, the 10-city and 20-city indexes rose 0.9%. Compared to 2011, however, the 10-city index fell by 1%, while the 20-city index dipped 0.7%.

In May, Phoenix reported a 12% increase in home prices compared to 2011, while Atlanta sounded a sour note, with prices dropping 15% compared to last year. Overall, home prices remain roughly 33% below their 2006 highs.

S&P officials noted that spring and summer months usually see higher home sales activity. While prices appear to be stabilizing, the rising trend would have to continue into the fall before a sustained housing price recovery could be declared.

The news did nothing for homebuilder stocks, which may already be overbought. Ryland (NYSE:RYL) and Toll Brothers (NYSE:TOL) saw their shares dip by about 1%, while D.R. Horton (NYSE:DHI) shares fell about 2% in early Tuesday trading.

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