Low borrowing costs and government tax credits help lift home sales this year
Home values in 20 US metropolitan areas declined less than forecast in the year ended in July, a sign the housing slump that led to the worst recession in seven decades is abating.
The S&P/Case-Shiller home-price index fell 13.3 per cent in July from a year earlier, the smallest drop in 17 months, the group said here on Tuesday.
Adjusted for seasonal variations, the gauge rose 1.2 per cent from the prior month. Foreclosure-driven price declines, low borrowing costs and government tax credits for first-time buyers have lifted home sales for much of this year, helping to slow the decline in prices. Stability in real-estate values and rising stock prices may help set the stage for a recovery in consumer spending that accounts for two thirds of the economy.
‘The firming of prices of the last few months should allow the beleaguered US consumer to take some heart that they are seeing some benefit from the end of the recession,’ David Semmens, an economist at Standard Chartered Bank in New York, said before the report. ‘We remain cautious in calling an end to the housing crisis as record levels of foreclosures still are coming onto the market.’ The index was forecast to fall 14.2 per cent, according to the median projection of 36 economists surveyed by Bloomberg News. Estimates ranged from declines of 12.5 per cent to 15 per cent. The measure fell 15.4 per cent in the 12 months ended in June. Continue reading
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