Housing prices make first annual increase in nearly two years

Housing prices showed their first annual increase in June in nearly two years, another indication that the sector is making a gradual recovery. 

Prices were up 0.5 percent from June 2011 in the 20-city index, the first time since September 2010 that prices rose on a year-over-year basis, according to the Standard & Poor's/Case-Shiller home price index released Tuesday.

"We seem to be witnessing exactly what we needed for a sustained recovery; monthly increases coupled with improving annual rates of change," said David Blitzer, chairman of the S&P's index committee. 

"The market may have finally turned around."

The 10-city index was up 0.1 percent in June compared with the same month last year.

Meanwhile both city indexes also were up for the April-June quarter, 5.8 percent and 6 percent respectively. 

Prices were up for the second straight month across all 20 cities, while all but two cities posted stronger gains in June than May — only Charlotte and Dallas saw a deceleration in their annual rates.

Prices would have increased for the third consecutive month if prices had not fallen in Detroit in April.

From May to June, average home prices in the 10-city index were up 2.2 percent in June and rose 2.3 percent across the 20 cities in the index.

Meanwhile, Detroit, Minneapolis, Chicago and Atlanta recorded the biggest one-month gains.

There were only six cities — Atlanta, Chicago, Las Vegas, Los Angeles, New York and San Diego — where the annual rates of change were still negative. Boston’s annual rate was flat. 

Phoenix had the largest year-over-year change at 13.9 percent. 

The index covers about half of all houses in the United States. 

The measure of national prices was up for the third straight month, showing a 1.2 percent increase in the second quarter compared with 2011 and was up 6.9 percent compared with the first three months of the year. 

The housing market is showing other indications of improvement with sales of existing homes showing an increase in July and a 10 percent jump over the past year. 

While mortgage rates are at near historic levels there are still troubles with access to credit for potential homeowners and housing appraisals, which are leading to cancelations of sales.