Home prices were on the rise in June for the third consecutive month due to tax incentives which led to a surge in home-buying but have since expired. Now that the demand isn’t as strong, experts predict that prices will fall for the rest of the year.
A 1 percent increase in June from May was noted today by the Standard & Poor’s/Case-Shiller 20-city home price index which was a 4.2 percent over last year’s figure. Seventeen cities noted that the prices were increasing on a monthly basis, but Las Vegas home prices fell. On a national scale, home prices were up 4.8 percent in the second quarter compared to the first quarter and can be attributed to to government tax credits totaling up to $8,000 which resulted in the increase of sales.
Since the tax credits have expired, employment is still quite high and lending rules are strict. Another result has been the surplus of unsold properties on the market. If the current sales pace were to continue, it would take over a year to sell all the properties available. This slow market forces home owners to significantly lower asking prices.
Throughout the country, prices increased 6 percent from their April 2009 low, but remain 28 percent lower than their peak in July 2006.