Data released by Standard & Poor’s for its S&P/Case-Shiller Home Price Indices show that the U.S. National Home Price Index improved in the third quarter of 2009, posting its second consecutive quarterly increase and further improvement in its annual rate of return.
The Home Price Index, which covers all nine U.S. census divisions, recorded an 8.9 percent decline in the third quarter of 2009 vs. the third quarter of 2008. This is a marked improvement over the 14.7 percent decline in the annual rate of return reported in the second quarter of 2009, and the 19.0 percent drop in the first quarter. The 10-city and 20-city composites recorded annual declines of 8.5 percent and 9.4 percent, respectively. These two monthly indices have generally seen improvements in their annual rates of return every month since the beginning of the year.
“We have seen broad improvement in home prices for most of the past six months,” says David M. Blitzer, chairman of the Index Committee at Standard & Poor’s. “However, the gains in the most recent month are more modest than during the seasonally strong summer months. Fewer cities saw month-to-month improvements in September than in August in both seasonally adjusted and unadjusted figures. |
Cash for Caulkers Would Provide Incentives, Opportunities
A program under consideration by the Obama Administration would offer $23 billion in incentives for home performance projects and create 500,000 jobs, according to published reports.
The proposed nationwide residential energy efficiency retrofit program, called Home Star, has been dubbed “Cash for Caulkers” in a New York Times article.
The proposed program would provide $23 billion in funding: $18 billion for homeowner incentives, $2 billion for quality assurance audits on efficiency projects and $3 billion for retailer incentives and awareness-building activities.
The Home Star program represents a significant opportunity for remodelers and existing home performance professionals, according to the Building Performance Institute, Inc. (BPI).
Improvement Spending Expected to Rebound to 2006 Levels
Even though residential repair and remodeling spending showed its first three-year period of decline in 2007-2009 since the U.S. Census Bureau began tracking R&R spending, Joshua Rosenbaum, executive director, USB Investment Bank, told an audience at the Home Improvement Research Institute (HIRI) fall conference in Chicago that residential improvement spending could rebound to 2006 levels by 2011.
Among the factors in that recovery are an aging housing stock, a large and growing installed housing base, a shift in demographics to more mature segments and movement toward green products and services.
Thirty-three percent of the current housing stock, which totals more than 130 million units, was built before 1960, Rosenbaum pointed out.
Rosenbaum, however, was careful to avoid being unduly optimistic about the housing market. While home prices appear to be stabilizing, he noted, negative equity and an expected wave of foreclosures could pressure pricing. And although affordability is currently attracting buyers, unemployment and tighter lending standards could offset the impact of affordability, he added.
At Near Record Levels
Nationwide housing affordability, bolstered by affordable interest rates and low house prices, hovered for the third consecutive quarter near its highest level since the series was first compiled 18 years ago, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI).
The HOI showed that 70.1 percent of all new and existing homes sold in the third quarter of 2009 were affordable to families earning the national median income of $64,000, down slightly from a near-record 72.3 percent during the previous quarter and up from 56.1 percent during the third quarter of 2008.