Home prices up for fourth month in a row

The S&P/Case-Shiller home price index 20-city composite rose 0.9 percent in July compared to June, narrowing the year-over-year decline to 4.1 percent. The agency reported seasonal factors and tentative signs of improvement in housing demand contributed to the increase in home prices.

However, only a few hard-hit areas such as Detroit and Washington, D.C., experienced a rise in prices compared to the same time in 2010, while all prices remain 31 percent below their peaks reported five years ago. According to the index, Detroit prices increased 3.8 percent from June and 1.2 percent from levels in July 2010, while D.C. prices jumped up 2.4 percent compared to June, and were 0.3 percent higher than July 2010.

“This is still a seasonal period of stronger demand for houses, so monthly price increases are expected,” David Blitzer, chairman of the S&P index committee, said in a statement. “We are still far from a sustained recovery.”

In addition, a survey conducted by the Professional Risk Managers' International Association found bankers expect delinquencies on consumer loans to rise, underwriting standards to become more stringent and the housing sector to struggle for years to come. The survey showed 49 percent of bank risk managers said housing prices will not return to levels seen in 2007 until 2020, while 73 percent predict mortgage defaults will remain elevated for the next five years.

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