Prices of U.S. single-family homes rose for the second consecutive month in June, exceeding expectations and adding to evidence that the three-year housing slump is easing, Standard & Poor's reported on Tuesday.
The S&P/Case-Shiller composite indexes of 10 and 20 metropolitan areas both rose 1.4 percent in June from May, almost three times the 0.5 percent increases of the month before. May's increases were the first in nearly three years.
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 percent and 45.3 percent 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. in Stamford, Connecticut.
Economists in a Reuters poll expected the 20-city index increased by 0.2 percent in June.
S&P said its U.S. National Home Price Index recorded a 14.9 percent decline for the second quarter, compared with a 19.1 percent year-over-year drop in the first quarter. Versus the first quarter, prices rose by 2.9 percent in the first such increase in three years, S&P said.
Regionally, only Las Vegas and Detroit posted declines in June over May, of 2 percent and 0.8 percent, respectively. Cleveland home prices registered the greatest increases for the past two months, topping 4 percent each time.