Home prices rise in June, but a drop may be looming
Home prices rose in June, according to a closely watched national index released Tuesday, but many experts predict a drop in values this year with the expiration of popular federal tax credits for buyers.
Prices of previously owned single-family homes rose a modest 1% in June over May and 4.2% over June 2009, according to the Standard & Poor’s/Case-Shiller index of 20 metropolitan areas.
“While the numbers are upbeat, other more recent data on home sales and mortgages point to fewer gains ahead,” said David M. Blitzer, chairman of the index committee at S&P.
Federal tax credits of up to $8,000 drove sales during the spring as first-time buyers flooded into the real estate market, boosting sales of entry-level homes. Sales have been falling since the expiration of those credits, with sales of previously owned homes plunging 27.2% in July and sales of newly built homes falling 12.4% that month.
Those sales drops came despite record-low rates for mortgages.
Home prices in California cities continued to appreciate, the non-seasonally adjusted index showed, with Los Angeles up 0.6% from May, San Diego up 0.4% and San Francisco up 0.3%.
Las Vegas was the only city that did not post a month-over-month improvement, falling 0.6%. Phoenix and Seattle were flat.
Cities in the Midwest gained the most, with Chicago, Detroit and Minneapolis all up 2.5%.
alejandro.lazo@latimes.com
Home prices rise in June, but a drop may be looming
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