Home prices in 20 U.S. cities climbed in June from a year earlier, the first gain in almost two years, indicating the market that triggered the recession is beginning to rebound.
The S&P/Case-Shiller index of property values in 20 cities increased 0.5 percent from June 2011, the first gain since September 2010, a report from the group showed today in New York. The median forecast of 29 economists surveyed by Bloomberg News called for a 0.05 percent drop. Nationally, prices jumped last quarter by the most in more than six years.
Rising demand driven by mortgage costs close to a record low has trimmed the glut of unsold houses on the market, giving property values a lift. Waning foreclosures and more access to credit would further stabilize the industry, and may bolster consumer confidence and spending.
“Sales are continuing to improve so that’s going to be supportive of prices,” Michael Englund, chief economist at Action Economics LLC in Boulder, Colorado, said before the report.
Stock-index futures held earlier losses after the report. The contract on the Standard & Poor’s 500 Index maturing in September dropped 0.2 percent to 1,405.4 at 9:03 a.m. in New York.
Estimates in the Bloomberg survey ranged from declines of 1.5 percent to a 1 percent gain, according to the survey. The Case-Shiller index is based on a three-month average, which means the June data was influenced by transactions in April and May.
The 20-city index improved after showing a 0.7 percent drop in the year ended May. Year-over-year records began in 2001.
Today’s report also included quarterly national figures. Prices covering all the U.S. increased 1.2 percent in the second quarter from the same time in 2011 compared with a 1.4 percent drop in the year ended March. They jumped 6.9 percent from the previous three months before seasonal adjustment. The gauge increased 2.2 percent after taking those changes into account, the best performance since the fourth quarter of 2005.
“We seem to be witnessing exactly what we needed for a sustained recovery,” David Blitzer, chairman of the S&P index committee, said in a statement. “The market may have finally turned around.”