RealEstateEconomyWatch.com

June home prices rose for the third consecutive month, ending the month with the largest seasonal gain year to date.

However, recent encouraging uptrends are likely driven by seasonal upswings in home-buying activities, rather than a reflection of more fundamental improvement in underlying housing conditions, according to the latest data on non-distressed home sales.

FNC’s Residential Price Index (RPI) indicates that single-family home prices were up in June at a seasonally unadjusted rate of 0.9 percent. As a gauge of underlying home value, the RPI excludes sales of foreclosed homes, which are often sold with large price discounts due to poor property conditions. FNC’s RPI is the industry’s first hedonic price index built on a comprehensive database blending public records with real-time appraisals of property and neighborhood attributes.

All three RPI composites (the National, 30-MSA, and 10-MSA indices) showed month-over-month increases in the last three months, rising more rapidly in June at 0.9 percent, 0.7 percent and 1.5 percent respectively. The seasonal upswings have brought a total of 2.1 percent improvement in home prices nationwide since March.

The indices’ year-over-year trends also showed modest improvement since May, declining less rapidly in June at 5.1 percent (National composite), 5.9 percent (30-MSA composite), and 4.9 percent (10-MSA composite).

Among the metro areas tracked by the 30-MSA composite, there is a 50-50 split in June between markets experiencing month-over-month increases and those experiencing month-over-month declines. Boston, Chicago, Cleveland, Denver, Detroit, and Nashville are among those that posted higher prices in each of the April, May, and June months that averaged 3.5 percent, 1.0 percent, 1.6 percent, 0.6 percent, 2.2 percent, and 2.2 percent per month. Boston in particular, has enjoyed extended rebound with prices going up 9.1 percent in the first half of 2011. Other cities including Cincinnati, Columbus, Minneapolis, Nashville, and San Francisco also showed robust year-to-date price trends, rising between 4-5 percent since January.

Las Vegas and Orlando, on the other hand, lead the nation in home price declines during 2011, down 5.9% and 4.1% respectively since January. The worst year-over-year trends in home prices are seen in Orlando, Las Vegas, Atlanta, Sacramento, Tampa, Baltimore, and Phoenix, down 15.8 percent, 12.6 percent, 12.5 percent, 10.9 percent, 10.6 percent, 9.4 percent, and 9.2 percent respectively from a year ago. Detroit and Boston are the only cities where home prices today are higher than a year ago by 4.0 percent and 3.6 percent, respectively.