The Standard & Poor’s/Case-Shiller index of home prices in 20 metropolitan areas rose 1.1% from May to June when left unadjusted for seasonal variations. Prices fell 4.5% from June 2010.
Prices often increase in the warmer months because of changes in the types of homes selling, particularly in parts of the country that have harsher weather than Southern California. Foreclosures make up a higher proportion of sales during the winter as families take a break from home shopping and cash-rich investors dominate the market. Higher sales volumes in spring and summer also push up prices.
“A seasonal kick accounts for the recent strength in the indexes,” Patrick Newport, a U.S. economist with IHS Global Insight, wrote in a note to clients. “This kick will wear off in the fall, when demand weakens and sellers have to give way on price, and prices will start dropping again.”
The Case-Shiller index also includes data that is adjusted for seasonal variations, but the experts who publish these numbers have cautioned that the large number of foreclosures on the market have distorted the statistics.
Read more here: Home prices notch third straight monthly gain