Home prices seen declining soon despite July uptick

A national home price index ticked up in July for the fourth straight month, but many cities are bracing for declines in the year ahead.

The price increases were fueled by now-expired home-buyer tax credits. With the peak buying season over, a record number of foreclosures, job concerns and weak demand from buyers are pushing prices down.

Standard & Poor's/Case-Shiller 20-city home price index released Tuesday increased 0.6 percent in July from June. Monthly changes are based on a three-month moving average for May, June and July. Sales in May and June were inflated by the government tax credits. July had the slowest sales pace in 15 years.

Twelve cities showed monthly price gains, while Cleveland's prices were flat and seven cities showed month-over-month declines. And the gains in many cities were weaker from the previous month.

The biggest monthly price increases were in New York, Detroit and Washington. All three cities had price increases of roughly 1 percent. Las Vegas and Phoenix had the largest declines, 0.8 percent and 0.6 percent respectively.

Nationally, prices have risen about 7 percent from their April 2009 bottom. But they remain nearly 28 percent below their July 2006 peak.

Most experts predict about 5 million homes will be sold this year. That would be in line with last year and just above 2008, the worst sales performance since 1997.

Last week the Multiple Listing Service reported that the median price for a Long Island home sold in August was $380,000, compared to $385,000 in August 2009, the listing service said. Nassau County's median price was $445,000, and Suffolk's price was $328,250.

- AP and staff reports