Home prices up slightly for third straight month; Signs of stabilization likely to be temporary, economists warn
Home prices posted another modest rise in August, according to data released Tuesday, but economists cautioned that the expiration of a home-buyer tax credit and rising unemployment could reverse signs of stabilization in the housing market.</br></br>In 20 large metropolitan cities, home prices rose 1 percent on a seasonally adjusted basis in August compared with the previous month, according to the S&P/Case-Shiller Home Price Index. That was the third month-over-month increase in the closely watched index.</br></br>Prices are still falling compared with a year ago, down 11.3 percent in August, and are off 30.2 percent from their peak in 2006, hovering at 2003 levels, according to the index.</br></br>But bolstered by historically low interest rates, cheap foreclosure properties and the $8,000 tax credit for first-time home buyers, prices are falling at a slower rate and the monthly increase reflects stabilization, economists said.</br></br>"It's a sign that there is a bottom in sight," said Cameron Findlay, chief economist for LendingTree.com, an online mortgage company. It bodes well, he said, for "stabilization of home prices."