The value of U.S. homes grew on a monthly basis in May for the first time in nearly three years, according to 20-city index released Tuesday.
The month-over-month increase was 0.5%, according to the report from financial data company Standard & Poor's and economists Case-Shiller. It was the first increase in the monthly index since July 2006, CNNMoney.com reports.
A Conference Board report showed consumer confidence this month fell more than forecast.
Stabilization of the worst housing market since the 1930s and a rebound in stocks may bring an end this quarter to the record slump in household wealth. Even so, Americans are likely to boost savings and limit spending as unemployment is projected to top 10 percent by early 2010, restraining any recovery from the deepest recession in five decades.
“The fact that home prices may be finding some semblance of stability is good news that things are not likely to get worse,” said Mark Vitner, a senior economist at Wells Fargo Securities LLC in Charlotte, North Carolina. “Folks are still concerned about their jobs” and “the loss of housing wealth is going to weigh on consumer spending for years to come,” Bloomberg reports.
Meanwhile David M. Blitzer, chairman of the Index Committee at Standard & Poor's said that "While many indicators are showing signs of life in the U.S. housing market, we should remember that, on a year-over-year basis, home prices are still down about 17 percent on average across all metro areas, so we likely do have a way to go before we see sustained home price appreciation," Bizjournals.com reports.