Residential property prices in the US decreased to the year ending in June, but prices are now falling at a much slower pace, leading to hopes that the market might be stabilising. The Standard & Poor/Case Shiller index fell by 4.5% from June 2010, which is slightly less than the 4.6% decline in values predicted by economists.
Values dropped by 0.1% in June which is the same percentage decrease as in May, and is viewed as a sign that the deterioration in the housing market is finally slowing. This is positive news, but it seems as if a full recovery is still several years away due to the number of foreclosures that are still pending, high unemployment rates and strict lending rules.
Economists don't expect house prices to rebound strongly even when the recovery finally picks up pace, especially as a recent report showed that consumer confidence in the US in August was at its lowest level since October 2008 which is mainly thought to be due to concerns over job prospects.
Property prices declined by 5.9% in the second quarter of 2011, compared to the second quarter in 2010, but they increased by 3.6% when compared to the first quarter of 2011 before seasonal adjustment, and by 0.1% after seasonal adjustment.
All of the 20 cities in the index showed a year on year decline to June, with Minneapolis registering the largest drop at 11%. Washington fared the best with just a 1.2% drop in prices.
In a recent speech, Ben Bernanke, Federal Reserve Chairman, expects the economy to improve during the second half of 2011, and said that the central bank would be able to aid the recovery if necessary, and that housing will stabilise.
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