(Case-Shiller article updated with additional stock information and commentary.)
NEW YORK (
) -- Home-builder stocks were trading modestly higher on Tuesday morning after a report that showed housing prices moderated in July.
SPDR S&P Home Builders ETF
was up 0.1% at $15.75. The stock of California-based
was falling 3.9% to $11.48.
were, however, all trading in the positive territory.
The S&P/Case-Shiller 20-city index, a leading measure of U.S. home prices rose 3.2% in July from a year earlier, after rising 4.2% in June. The report was largely in line with expectations, with consensus expecting an increase of 3.3%, according to
. Housing prices had shown signs of moderating in June and economists were expecting the trend to continue as the expiration of the tax credit for first time home buyers in April has reduced demand for housing.
The data for July is based on a three-month average and is therefore partly reflective of transactions in May and June.
"While we could still see some residual support from the homebuyers' tax credit, which covers purchases closing through September 30th, anyone looking for home prices to return to the lofty 2005-2006 might be disappointed. Judging from the recent behavior of the housing market, stable prices seem more likely," said David Blitzer, Chairman of the Index Committee at Standard & Poor's.
10 of the 20 metropolitan areas showed negative annual growth according to the report, compared to only 5 in June. The Californian market also moderated, though Los Angeles, San Francisco and San Diego recorded the strongest annual growth rate of 7.5%, 9.3% and 11.2% respectively.
The 20-city composite index climbed 0.6% in July over the previous month. Detroit saw the biggest monthly price increase at 1.6% while Las Vegas touched a new low with a monthly price decline of 0.8%.
Doug Roberts, managing principal of Channel Capital Research, says the latest numbers still reflect the lag effect of stimulus measures. According to Roberts, housing prices are likely to stay under pressure in the next few months as we enter into a season that is traditionally slow for the housing market. "We are going into a season where people do not like to move, as they do not want their children to have to change schools mid-year. Traffic tends to die down and prices go down," said Roberts
The other thing that could impact home prices is the rate of foreclosures. Roberts said banks are trying to hold off from foreclosing properties as the costs of upkeep and the need to find new tenants increases the burden on banks. But how long they manage to postpone foreclosing homes will be another factor that has a bearing on prices he said.
-- Written by Shanthi Venkataraman in New York
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