By Courtney Schlisserman
July 28 (Bloomberg) -- Home prices in 20 major U.S. metropolitan areas probably fell at a slower pace in May, another sign the market is stabilizing, economists said ahead of a report today.
The S&P/Case-Shiller home-price index fell 17.9 percent from a year earlier following an 18.1 percent drop in April, according to the median of 32 forecasts in a Bloomberg News survey. Another report may show consumer confidence fell in July for a second month.
Price declines may keep moderating as demand steadies and distressed properties account for a smaller share of transactions. Even so, rising unemployment, stagnant confidence and the loss of wealth caused in part by the drop in property values mean a rebound may be slow to take hold.
“The housing market looks like it has found a floor and we may be on the way to some kind of gradual improvement,” said Ken Mayland, president of ClearView Economics LLC in Pepper Pike, Ohio. “Sellers are definitely getting more realistic about what they can get for their houses.”
The S&P/Case-Shiller index is due at 9 a.m. New York-time. Estimates ranged from declines of 17.5 percent to 18.3 percent.
The measure dropped 19 percent in the year ended in January, the most since records began in 2001.
At 10 a.m., a report from the New York-based Conference Board may show its consumer confidence index edged down to 49 from 49.3 in June. Estimates ranged from 44 to 56. The measure reached an eight-month high in May.
The home-price figures aren’t adjusted for seasonal effects so economists prefer to focus on year-over-year changes instead of month-to-month.
Other Measures
The report would buttress other measures that have shown a deceleration in price declines. The Federal Housing Finance Agency said last week that its purchase-only price index was down 5.6 percent in May from a year earlier, the smallest annual drop in 10 months.
The FHFA index is a national measure that tracks houses bought with mortgages purchased by Fannie Mae or Freddie Mac and excludes many of the foreclosure sales and properties bought with non-conventional mortgages. In addition to being limited to 20 areas, the S&P/Case-Shiller report also includes distressed properties and those bought with non-conventional loans such as jumbo mortgages.
“There isn’t one perfect house-price number, you want to look for consistency across all of them,” said Jonathan Basile, an economist at Credit Suisse Holdings Group Inc. in New York. “When you’re looking for a turn, you want to see all of them start to turn.”
Shares Improve
Homebuilder shares have risen over the last two weeks on signs the market may be stabilizing. The Standard & Poor’s Supercomposite Homebuilding Index rose 4.4 percent yesterday to close at 254.38, the highest level since May 5.
Foreclosure filings reached a record in the first half of the year, providing competition for homebuilders and pushing down the value of homes. Even so, figures from the National Association of Realtors show the share of distressed property sales may be easing.
The share of homes sold as foreclosures or otherwise distressed properties fell to about 31 percent in June, down from 45 percent to 50 percent seen earlier this year, the real- estate agents’ group said last week.
Combined sales of new and existing homes in June reached the highest level in eight months, according to figures from NAR and the Commerce Department.
More Unemployment
Purchases are unlikely to rebound quickly as rising unemployment, which economists surveyed by Bloomberg forecast will top 10 percent by early 2010, threatens to scare away some buyers.
Declines in home prices and stocks cut household net worth by $13.9 trillion through the first quarter, according to figures from the Federal Reserve. The need to rebuild tattered finances has prompted Americans to limit spending and boost savings.
“We are preparing for this recovery to take a while to pick up steam,” Frits van Paasschen, chief executive officer of Starwood Hotels & Resorts Worldwide Inc., said in a conference call with analysts last week. The third-largest U.S. lodging company’s second-quarter earnings beat analysts’ estimates.
Bloomberg Survey
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Case Shil Consumer
Monthly Conf
YOY% Index
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Date of Release 07/28 07/28
Observation Period May July
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Median -17.9% 49.0
Average -17.8% 49.1
High Forecast -17.5% 56.0
Low Forecast -18.3% 44.0
Number of Participants 32 67
Previous -18.1% 49.3
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4CAST Ltd. -17.7% 46.0
Action Economics -17.8% 44.0
AIG Investments -17.5% 44.0
Aletti Gestielle SGR --- 45.0
Ameriprise Financial Inc --- 50.8
Argus Research Corp. --- 52.0
Banesto -17.9% 48.4
Bank of Tokyo- Mitsubishi --- 48.4
Barclays Capital -17.9% 50.0
BBVA -17.9% 50.2
BMO Capital Markets -17.9% 52.0
BNP Paribas --- 47.0
Briefing.com --- 49.0
C I T I C Securities -18.0% 49.0
Calyon --- 46.5
Capital Economics -17.9% 50.0
ClearView Economics -18.0% 54.0
Commerzbank AG -18.0% 46.5
Credit Suisse --- 47.0
Daiwa Securities America --- 52.0
Danske Bank --- 48.4
DekaBank --- 50.0
Desjardins Group -17.9% 48.5
Deutsche Bank Securities --- 49.5
DZ Bank -17.8% 47.0
Exane --- 51.0
First Trust Advisors --- 49.0
Fortis -17.7% 50.0
Goldman, Sachs & Co. --- 50.0
Helaba --- 49.0
Herrmann Forecasting -17.7% 50.6
HSBC Markets -17.7% 49.0
IDEAglobal -17.8% 48.0
IHS Global Insight --- 47.0
Informa Global Markets --- 48.2
ING Financial Markets -17.8% 49.7
Insight Economics -17.5% 51.5
Intesa-SanPaulo --- 47.0
J.P. Morgan Chase -17.5% 55.0
Janney Montgomery Scott L -18.1% 48.0
Johnson Illington Advisor --- 44.5
JPMorgan’s Private Wealth --- 49.2
Landesbank Berlin --- 46.5
Landesbank BW -17.9% 48.5
Merrill Lynch/BAS -18.3% 52.0
MFC Global Investment Man --- 48.0
Moody’s Economy.com --- 49.0
Morgan Stanley & Co. --- 50.0
Natixis -17.9% 53.0
Newedge --- 48.0
Nord/LB --- 47.0
Raymond James --- 53.0
RBS Securities Inc. --- 48.0
Ried, Thunberg & Co. -17.8% 50.0
Schneider Foreign Exchang --- 47.0
Scotia Capital -17.9% 50.0
Societe Generale --- 49.0
Standard Chartered -17.9% 47.5
Stone & McCarthy Research --- 47.5
TD Securities -17.5% 56.0
Thomson Reuters/IFR --- 51.6
UniCredit Research -17.6% 46.0
Union Investment --- 50.3
University of Maryland -17.9% 49.3
Wells Fargo & Co. --- 47.8
WestLB AG -17.9% 52.0
Westpac Banking Co. -17.7% ---
Wrightson Associates --- 50.0
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To contact the reporter on this story: Courtney Schlisserman in Washington at cschlisserma@bloomberg.net
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