Home prices in 20 U.S. cities fell in June at a slower pace than forecast, signaling the real- estate crisis that triggered the worst recession since the 1930s is dissipating.
The S&P/Case-Shiller home-price index declined 15.4 percent from a year earlier, the smallest drop since April 2008, the group said today in New York. The gauge rose from the prior month by the most in four years.
Lower prices and government stimulus efforts have made homes more affordable to first-time buyers, spurring increases in sales that will eventually stem the slide in property values. Gains in housing and stocks will speed the process of restoring the record loss of wealth that has shackled consumer spending, which accounts for 70 percent of the economy.
“We’re starting to gain some traction in prices,” Maxwell Clarke, chief U.S. economist at IDEAglobal in New York, said before the report. Even so, “we have some ways to go before people see real returns on investment in property.”
Read Shobhana Chandra’s full article “Home Prices in 20 U.S. Metro Areas Decrease Less Than Forecast” in Bloomberg (August 25, 2009).