Despite a number of recent economic and real estate gains at the beginning of 2012, home prices continued their decline into negative territory during the first quarter.
Overall, prices dipped 2 percent during the first three-month period, according to the most recent Standard & Poor's/Case-Shiller Home Price Index. As a result of this decline, prices are now at the lowest level recorded since the housing market collapsed nearly six years ago. Prices are now 35.1 percent lower than they were at their peak in 2006.
Local market paint different picture
Meanwhile, when examining the report's 10- and 20-city composites, real estate data shows that each one fell 2.8 and 2.6 percent, respectively. However, even though the national average trended lower, experts from the company said that some local markets gained momentum.
"While there has been improvement in some regions, housing prices have not turned," said S&P index committee chairman David Blitzer. "This month's report saw all three composites and five cities hit new lows. However, with last month’s report nine cities hit new lows. Further, about half as many cities, seven, experienced falling prices this month compared to 16 last time."
On a local basis, some cities that saw prices hit new post-recession lows include Atlanta, Chicago, Las Vegas, New York and Portland.
Consumer sentiment on the rise
However, this overall dip in prices could work in favor of buyers as the the peak season for activity draws closer. Even though prices are down, the most recent Thomson Reuters/University of Michigan consumer sentiment index rose to the highest level recorded since October 2007. This could be an indicator that prospective buyers are starting to find the financial safety and soundness required to finally make the transition to homeownership.
Specifically, the report indicated that the index rose to 79.3 out of 100 in May, up from April's score of 76.4. However, some experts say that consumer sentiment could remain flat until the presidential election finally take place in November.
"The most likely prospect is that job growth resumes at a modest pace and that confidence remains largely unchanged until after the November election and decisions about tax policy are made," said survey director Richard Curtin.
With mortgage rates at all-time lows and home prices descending, this could result in an upswing of activity throughout the housing market in the coming months.