Case-Shiller Housing Index Down Again In February

March's new-home sales were up nicely, but February's figures were dismal. Confirmation of February's bad state was given by the latest number from the S&P Case-Shiller Housing Index. Home prices fell 1.1% as of February, making for a 3.3% decline from a year ago. Believe it or not, prices rose in Detroit: that was the only city out of 20 to see gains in February.

“There is very little, if any, good news about housing. Prices continue to weaken; trends in sales and construction are disappointing,” said David Blitzer, chairman of the index committee at Standard & Poor’s.

Housing has been plagued by issues that have created a Gordian knot for the sector.

On the supply side, an oversupply of distressed properties is pushing prices down. There are also worries of a so-called “shadow inventory” of homes that sellers and banks want to list, but are waiting for the right moment to do so.

On the demand side, many consumers are still having difficulty qualifying for mortgages even though rates are low.

There may be hope for March and in the future, particularly if the labour market improves, but the Case-Shiller uses a three-month average. Any improvement would be muffled.