Home prices trending up
WASHINGTON (AP) -- U.S. home prices are finally starting to increase consistently.
A gauge of national home prices rose in June compared with the same month last year, according to the Standard & Poor's/Case Shiller index released Tuesday. The year-over-year increase was the first since September 2010, a year when housing benefited temporarily from a federal home-buying tax credit.
The report also noted that all 20 major metro areas by the S&P/Case Shiller index posted gains in June from May. That's the second straight month in which prices rose in every city measured.
"I think we have turned the corner on prices," said David Blitzer, chairman of the S&P's index committee. "It looks very good."
A decline in foreclosures and the lowest mortgage rates in decades have helped some of the cities hardest hit by the housing bust. Prices have surged nearly 14 percent, for example, in the Phoenix area in the 12 months that ended in June. In Miami, they've risen 4.4 percent.
The steadiness of the price increases is helping bolster a nascent housing recovery that began earlier this year. Last week, the National Association of Realtors said sales of previously occupied homes jumped 10 percent in July compared with the same month last year.
Builder confidence rose this month to its highest level since the housing market went bust five years ago. And the average rate on a 30-year fixed mortgage has been below 4 percent all year.
As prices rise, more Amer icans will likely be inclined to put their houses up for sale. That could further energize the market, which has been hampered by a low supply of available homes.
"The best news on the housing front is that prices have turned," said Patrick Newport, U.S. economist at IHS Global Insight.
Newport said rising prices could help many Americans who owe more on their mortgages than their homes are worth now. It could also boost consumer spending if people feel wealthier. Consumer spending accounts for about 70 percent of economic activity.
Even with the gains, prices have a long way to go to recover from their plunge during and after the housing bubble burst in late 2006 and early 2007. Nationally, prices in June were 31.6 percent below the peak hit in April 2006, based on the S&P/Case Shiller index.
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