The latest U.S. housing market data released Tuesday underscore the persisting trend of uneven performance in the industry.
The S&P/Case-Shiller Home Price Index showed prices hit post-bubble lows in February, and U.S. home sales data show that while not all housing news is dismal, a strong and stable recovery is a long way off.
The U.S. housing sector has been a drag on the economy since a home price bubble burst and helped cause the 2007-2009 recession. While many economists maintain that a budding recovery is blooming in the troubled sector, recent housing market data are simply another wake-up call.
Here's a look at the numbers.
Case-Shiller Home Price Index Falls
The Case-Shiller Home Price Index of 20 cities revealed a price drop from January to February of 0.8% (on a non-seasonally adjusted basis). The 10-city index also fell 0.8%.
The 20-city index declined 3.5% from a year ago, while the 10-city composite slipped 3.6%.
"Nine housing markets and both composites hit post crisis lows," David Blitzer, a spokesman for S&P, told CNN Money. Included in the nine markets are Atlanta, Charlotte, Chicago, Las Vegas and New York.
Blitzer went on to note, "While there might be pieces of good news in this report, such as some improvements in many annual rates of return, February 2012 data confirm that, broadly speaking, home prices continued to decline in the early months of the year."
Foreclosures and other distressed property sales continue to be the main challenge for home prices, Pat Newport, an analyst for IHS Global Insight relayed to CNN.
"We still have 6 million homeowners who are late on their payments," said Newport. "We'll still have lots of foreclosures, which will depress prices."
In fact, with January's mammoth $26 billion mortgage settlement between five major banks and a group of state attorneys general, foreclosures that had been held up for a year or more are now moving forward.
"Enough homes are in the foreclosure pipeline to keep house prices falling through much of this year," Celia Chen, a housing economist at Moody's Analytics, told the Los Angeles Times.
U.S. Home Sales Slump
A separate report released Tuesday from the U.S. Commerce Department showed that new single-family home sales slumped in March to their lowest level in four months.
Sales fell 7.1% in March to a seasonally adjusted 328,000 unit annual rate. The reports also showed that inventory of new homes on the market inched down to a record low in March at 144,000 units.
"[T]he dropoff in sales reported for March signals some slowing in momentum heading into 2Q," Daniel Silver, an analyst with JPMorgan Chase Bank, wrote in a report.
At March's sales pace, the amount of time it would take to clear houses currently on the market is 5.3 months, up from 5 months in February.
The government also released revised numbers for prior months' reports. Sales were higher in December, January and February than previously thought.
Stan Humphries, chief economist at Zillow, told Reuters that despite this month's decline, "Looking forward, we think home sales will continue to trend upward, which ultimately will result in a slower rate of home value depreciation."
But Humphries included a note of caution: "Any housing recovery will be dependent on job growth. Continued progress in this area is essential to keeping the housing recovery, such as it is, on track."
Factors Weighing on U.S. Housing Market Data
The high unemployment rate and the persistent lack of job security have hampered a housing market recovery.
In addition, a growing number of Americans are filing for bankruptcy, further marring credit scores, and leaving the prospect of owning a home distant and dismal. Mortgage defaults, foreclosures and short sales are still robust. Home repossessions by banks endure, and the number of new homes being constructed is at strikingly low levels.
Americans are no longer so eager or anxious to purchase a home, reflected in the decade's low demand for home loans. Without more loans, there will not be an increase in home sales. Very few people pay for homes in cash.
Changes in the mortgage industry have made it increasingly difficult for potential homeowners to qualify for a mortgage.
As Money Morning Capital Waves Strategist Shah Gilani wrote last month, "no matter how low interest rates go, nobody is buying anything if they can't qualify for a mortgage."
Lenders have been consistently raising standards for borrowers.
"Long gone are the days of the famously named NINJA loans, as in no-income, no assets, no problem," Gilani noted.
The Case-Shiller Home Price Index for March will be released May 29; U.S. home sales for April will be out May 23.
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