Spring buying gives housing market temporary lift
Tuesday, July 26, 2011
WASHINGTON (AP) — Home prices rose for the second straight month in most major U.S. cities and are stabilizing after years of declines. But analysts say the trend in prices hardly signals a rebound for the troubled housing market.
A flurry of spring buyers is helping boost sales. At the same time, millions of foreclosures are in limbo, awaiting the results of a government investigation into improper practices by mortgage lenders. Once that probe is complete, banks will resume seizing homes and prices will likely fall again.
The Standard & Poor’s/Case-Shiller home-price index released Tuesday showed that prices rose in May in 16 of the 20 cities tracked.
Boston, Minneapolis and Washington posted the biggest monthly increases. Prices in Detroit, Las Vegas and Tampa, Fla. — three cities hit hardest by the housing crisis — fell to their lowest points since the recession began.
Price declines have been getting smaller through the year. Seasonally adjusted prices have fallen a modest 1.2 percent over the past six months, according to the index. That’s roughly a third of the decline from the previous six months.
But analysts say the weakening job market and the uncertainty over foreclosures could lead to deeper price declines in the second half of the year. They estimate prices will fall another 5 to 10 percent by year’s end.
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