Home Price Increase

There have been signs lately that prices of homes in many areas across the nation are stabilizing and the housing market is starting to heal.
In May, numbers where posted indicating that home prices hit their first monthly increase since the summer of 2006. These numbers were obtained by the Standard & Poor's/Case-Shiller 20-city index. The prices of homes rose from the month of April in 13 of the 20 cities tracked in the index, a few of these cities included were Boston, Cleveland and Dallas.
There is also good news concerning the sales of newly built and existing homes. Their sales are continuing to climb for the third straight month as of June. Also, construction on new homes, while still not up to par, is at the best it's been since last fall.
The home-price index rose 0.5 percent from April to May to a reading of 139.8, which is still 17.1 percent lower than the reading of 168.6 from a year ago last May. This is the fourth consecutive month that the home-price index has indicated that prices have started to head towards positive areas.
The index has lost more than 32 percent since its peak of 206.52 three years ago. Currently, home prices are back to mid-2003 levels.
The Case-Shiller index measures the increase and decrease of home-prices relative to January 2000. The index has a base reading of 100. If you were to have a reading of 160, that would mean that home prices increased by 60 percent since the beginning of the index.
The index bases its numbers by tracking repeat sales of a designated group of properties in each city. The data is prevented from being skewed because the types of homes sold never changes. The data is obtained by the sales price of given property over a period of time.
Many areas are not included in the index; however, the index does measure price data in 20 major metropolitan areas in 15 U.S. states and the District of Columbia.
The index is closely watched by investors to gauge the level and direction of home prices in the nation. The Case-Shiller index contains a larger variety of properties than the index created by the Federal Housing Finance Agency.
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