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U.S. home prices were up for the fourth straight month in May and came in better than most economists expected.
According to the Standard & Poor's/Case-Shiller home price index, the price of single-family homes rose a seasonally adjusted 0.9 percent from April to May, versus forecasts for a 0.5 percent increase. But home prices did fall 0.66 percent year-over -year.
"The housing market seems to be stabilizing, but we are definitely in a wait-and-see mode for the next few months," said David Blitzer, chairman of the index committee at Standard & Poor's, in a statement.
More than half the 20 cities followed by the index experienced gains in home values on a yearly basis. Phoenix, Arizona, one of the cities hit hardest by the housing bubble, led these gains with a 11.5 percent rise in prices. On the flip side, Atlanta, Georgia saw prices decline by the largest margin of 14.5 percent.
"I think it is pretty clear that the housing market has bottomed and has started to turn up," says The Wall Street Journal's David Wessel, noting improving new and existing home sales as well as the shrinking inventory of unsold houses.
He says housing will be more of a plus than a drag on the economy and GDP going forward.
Wessel, who recently wrote the book "Red Ink: Inside the High-Stakes Politics of the Federal Budget," argues that the federal government could do more to boost the weak housing market. The Obama administration may have several agencies devoted to the housing market, he says, but none have been that effective in reducing the number of foreclosures. And don't expect to hear policy proposals on the campaign trail he says, noting that former presidential candidate and Arizona Senator John McCain got pilloried by both the left and the right for his housing recommendations in 2008. "We should hear more [but] we won't."
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