The U.S. residential real estate market is struggling to fully recover and remains range-bound, with prices hovering near multiyear lows despite small signs of improvement in some cities, the latest S&P/Case-Shiller Home Price Indices data showed.

While 15 out of the 20 metro areas surveyed, and both the 10-City and the 20-City Composites saw growth in May compared with the previous year, month-to-month data weren’t nearly as strong, posting slight gains in all surveyed areas, save for Las Vegas.

That divergence suggested what many analysts and economists have been saying for some time; namely, that some of the market’s strength in past months was based on both the Home Buyers’ Tax Credit program that expired in April and evidence of seasonal strength typical of this time of year as opposed to a bona fide recovery.

The 10-City and 20-City Composites saw in May annual return increases of 5.4 percent and 4.6 percent, respectively, compared with May 2009, but in the broader picture, the last seven months of data suggest the market remains essentially flat.

“While May’s report on its own looks somewhat positive, a broader look at home price levels over the past year still do not indicate that the housing market is in any form of sustained recovery,” S&P’s Chairman of the Index Committee David Blitzer said in the report. “Since reaching its recent trough in April 2009, the housing market has really only stabilized at this lower level.”

Bouncing At The Bottom

The month-on-month improvement was “largely expected,” Blitzer said, adding that June’s preliminary data don’t suggest a clear path to the upside.

“We need to watch where the housing markets will go after these temporary stimuli go away,” he said in the report. “It still looks possible that the housing market might bounce along the bottom for the foreseeable future, before showing any real improvement that will filter through the rest of the economy.”

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