U.S. home prices increased in February for the first time in more than two years, according to updated data released by Jacksonville, Fla.-based Lender Processing Services (LPS), which recorded a 0.2% rise for the month.
‘Our home price index (HPI) shows an increase in seasonally adjusted prices this month for the first time since March 2010, and for only the third time in five years,’ says Raj Dosaj, vice president of LPS Applied Analytics. ‘There have been signs of price declines slowing for a few months now, and our estimates for next month are flat to slightly positive. Without a pickup in sales volumes from their current anemic levels, it's hard to be more optimistic that the market may be nearing the end of its fall.’
Dosaj adds that this slight increase should not be construed as a cause for celebration.
‘Reasons for caution are clear, as we've been here before,’ he says. ‘Non-seasonally adjusted prices increased for a few months in early 2009, 2010 and 2011 – trends that all ended by summer, after which all the gains – and then some – were lost. As is true this month, those temporary increases were on low sales volumes – about 30 percent lower than at any point since 1998. Furthermore, the inventory of distressed homes remains high, which will continue to put a drag on prices.’
The LPS HPI places the national average home price in February at $195,000. The March estimate is also priced at the same figure.