WASHINGTON (AP) — Home prices rose for a fourth straight month in most major U.S. cities in July, buoyed by the peak buying season. But the housing market remains depressed, and prices are expected to decline in the coming months.
The Standard & Poor’s/Case-Shiller index showed Tuesday that home prices increased in July from June in 17 of the 20 cities tracked.
Prices rose sharply in Minneapolis and Chicago. Prices in two cities hit hardest by the housing crisis — Las Vegas and Phoenix — declined.
Analysts cautioned that prices will likely fall this fall and winter. Over the past 12 months, prices have fallen in all but two cities: Detroit and Washington.
“This is still a seasonal period of stronger demand for houses, so monthly price increases are expected,” said David M. Blitzer, chairman of Standard & Poor’s index committee. “While we have now seen four consecutive months of generally increasing prices, we do know that we are still far from a sustained recovery.”
In Detroit, prices have risen 1.2 percent in the 12-month period. Still, homes prices there were equal to 1995 levels in July. In Washington, home prices have increased 0.3 percent in that time and were equal to 2004 levels.
Housing is a key reason the economy has struggled more than two years after the recession officially ended.
High unemployment, larger required down payments and tighter credit are preventing many buyers from entering the market. Many who could afford to buy are waiting because they are worried the U.S. could fall back into another recession and prices could fall further.
Sales of previously occupied homes are only slightly ahead of last year, which was the weakest since 1997.
New-home sales dropped in August for a fourth straight month. This year is shaping up to be the worst for sales of new homes on records dating back to 1963.