Home Prices Rebound in Q2 2011 – Prices at 2003 Levels

Home prices increased 3.6% over the second quarter of this year, after having fallen 4.1% in the first quarter, according to the latest S&P/Case Shiller index released Tuesday.
With the second quarter’s data, the national index reading recovered from the double-dip cyclical low hit at the end of the first quarter, but still posted an annual decline of 5.9% when compared to the second quarter of 2010.
Nationally, home prices are back to their early 2003 levels. By the S&P's company assessment, nearly a year’s worth of pricing was recovered over Q2. At the time the company’s index officially double-dipped, reporting on data through the end of March, S&P put home prices back in their mid-2002 range.
The recent improvement we’re seeing in home price indices is largely due to the fact that discounted distressed sales are accounting for a smaller share of overall sales – primarily a byproduct of the slower rate at which foreclosures are being processed, rather than a reduction in the number of homes facing foreclosure.
With another three million homes still likely to enter foreclosure, prices could fall back in the second half of this year, perhaps by 2%, which would ultimately put 2011 prices 3% below last year.