US home prices jump in June

 
City A.M. Reporter
Prices of US single-family homes gained more than expected in June and rose in the second quarter, reflecting the lingering boost from homebuyer tax credits that ended in April, Standard & Poor’s/Case Shiller home price indexes showed yesterday.

The
effects of buyer tax credits have largely filtered through and home prices will be hard-pressed to sustain these gains with unemployment still near 10 per cent, economists agree.

The S&P/Case Shiller composite index of 20 metropolitan areas rose 0.3 per cent in June from May on a seasonally adjusted basis. The rise was better than the 0.2 per cent increase expected by economists polled by Reuters, though slower than the 0.5 per cent rise in May.

Unadjusted, the 20-city index gained one per cent following May’s 1.3 per cent jump. In the year, prices rose 4.2 per cent, surpassing the Reuters forecast of 3.9 per cent. S&P, which publishes the indexes, also said home prices nationally rose 4.4 per cent in the second quarter after a 2.8 per cent drop in the first quarter.

Prices rose in 17 of the 20 metro areas in June, S&P said, adding that in the first half of the year 15 of the 20 areas had positive annual growth rates.

The housing market is in better shape than a year ago, S&P said.

Most cities posted smaller price gains in June, though, and the annual growth rates slowed in 14 of the metro areas.

“The worry starts when you remember that the Homebuyers' Tax Credit has expired, foreclosures are still at high levels, and July data on home sales and starts were very, very weak,” David M Blitzer, chairman of the index committee at S&P, said in a statement.