New data has bolstered confidence that the long slide in US house prices may have ended in April. The Case-Shiller index, the pre-eminent guide to the national housing market, which measures prices in 20 metropolitan areas, showed an unexpectedly strong 1.4 per cent rise in prices in June.
That was the second month in a row that prices have risen. According to the survey, average US home prices were 15.4 per cent below their level in June 2008. The annual rate of decline peaked at 19.0 per cent.
Financiers around the world have focused on the US housing market because of its role in the credit crisis. Trillions of dollars of credit derivatives are based on US residential mortgages, and it was the decline in US house prices and the spike in mortgage defaults that triggered the crisis in the credit markets in 2007.
Ian Morris, head of US economics at HSBC, said it now appeared that April could have been the bottom for the market. "Although US housing markets are often seen as local, the crash was national, and the early recovery also appears to be a broadly national trend. The breadth of gains across cities was impressive, with 18 out of 20 cities recording increases in June, some of them very strong."Reuse content