NEW YORK—The residential real estate market may be showing signs of stabilizing, as the latest S&P/Case Shiller index of home prices rose in June.
The latest report from the Standard & Poor’s Index, which is a leading home price indicator tracking the top 20 U.S. metropolitan areas, showed that housing prices rose from May to June by 1.1 percent this year, unadjusted for seasonality.
Nineteen out of the 20 areas covered by S&P were showing higher real estate prices in June than May, with Portland, Ore., the only area which remained flat.
“This month’s report showed mixed signals for recovery in home prices. No cities made new lows in June 2011, and the majority of cities are seeing improved annual rates,” said David M. Blitzer, chairman of the index committee for S&P in a statement.
While the report was positive, summer is generally a good month historically for home prices as demand is typically higher. Compared with last June, June 2011 is 4.5 percent lower, signaling that the real estate market is actually less robust than last year.
“Most people think that when the downturn ends the recovery will be pretty good, but that’s not going to be the case at all,” analyst Paul Dales of Capital Economics Ltd. said in a Bloomberg report.
Analysts believe that the real estate market is expected to remain flat at best going forward, especially since the unemployment rate remains high nationally, and consumer confidence is slipping.
The Conference Board released its consumer confidence gauge for August 2011 on Tuesday and its reading dropped to 44.5, the lowest figure since early 2009. The drop is mainly due to negative sentiment on jobs and business prospects.
