U.S. home prices post modest gain in second quarter

U.S. home prices rose modestly in the second quarter this year, a leading measure for the U.S. residential housing market showed Tuesday.

But other recent housing indicators contain more ominous signals as tax incentives have ended and foreclosures continue.

The Standard & Poor's/Case-Shiller Home Price Indices, the leading measure of U.S. home prices, show the U.S. national home price index rose 4.4 percent in the second quarter, after having fallen 2.8 percent in the first quarter. Nationally, home prices are 3.6 percent above their year-earlier levels.

The measure of home prices in the biggest U.S. cities, the 20-city home price index, posted a 1 percent increase in June from May and was up 4.2 percent from a year ago. After 16 consecutive months of improvement in their annual rates of return, June's figures were the first to moderate from their prior month's pace, pointing to a possible deceleration in home price returns. The 20-city index was up 4.6 percent in May from the same period last year.

"While the numbers are upbeat, other more recent data on home sales and mortgages point to fewer gains ahead," said David M. Blitzer, Chairman of the Index Committee at Standard & Poor's. "Even with concerns about near term developments, we recognize that the housing market is in better shape than this time last year."

Performances of the U.S. housing market in recent months were primarily driven by a government tax break under which new home buyers could take advantage of tax credits of up to 8,000 dollars. It expired in April. Buyers initially had to close their purchases by June 30, but Congress extended the deadline to the end of September.

"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. The inventory of unsold homes and months' supply data were particularly troubling. If this relative weakness in demand continues, it will likely filter through to home prices in coming months," Blitzer said.

Source:Xinhua