Home prices posted their first quarterly increase in three years in the quarter that ended in June, adding to evidence that the housing slump is easing.
The Standard & Poor's/Case-Shiller's U.S. National Home Price Index, out Tuesday, was up nearly 3% from the first quarter, though it was still down almost 15% from the second quarter last year.
Home prices are at levels not seen since early 2003. Prices have fallen 30% from the peak in the second quarter 2006.
The monthly index of 20 major cities increased 1.4% from May to June, second straight month the index registered a gain. All but two cities, Las Vegas and Detroit, saw home prices rise in June from May, and Dallas and Denver clocked their fourth-straight monthly increases.
Prices, however, have a long way to go to recover completely. Every metro showed annual declines, with fifteen reporting double-digit drops.
Optimism over a housing recovery blossomed last week after reports showed rising confidence among homebuilder and sales of existing homes rose in July for the fourth consecutive month. Economists expect the sector's recovery could help the nation emerge from recession and further stabilize financial markets that have suffered their worst crisis since the 1930s.
The 10- and 20-city indexes have dropped 54.3% and 45.3% from their 2006 peaks, respectively.
"This is just another month that supports those that think we have bottomed, or are nearing a bottom," said Jesse Litvak, a managing director in mortgage- and asset-backed securities at Jefferies & Co.
Economists in a Reuters poll expected the 20-city index to increase 0.2% in June.
The Case-Shiller index is a composite of home price indexes for the nine U.S. census divisions. The 20-city index measures home price increases and decreases relative to prices in January 2000. The base reading is 100; so a reading of 150 would mean that home prices increased 50% since the beginning of the index.