2010.08.3110:25:00UTC+00Home Prices Increase More Than Expected In June

While Standard & Poor's released a report Tuesday morning showing that its reading on home prices in 20 major metropolitan areas increased by more than expected in June, the data was likely skewed by the homebuyer tax credit.

The report showed that the S&P/Case-Shiller 20-City Composite Home Price Index increased at an annual rate of 4.2 percent in June. The growth represents a slowdown from the 4.6 percent increase seen in May but still exceeded economist estimates for a 3.1 percent increase.

S&P noted that the deceleration in the pace of price growth comes on the heels of 16 consecutive months of improvement, which it said points to a possible deceleration in home price returns.

On a monthly basis, the 20-City Composite Home Price Index rose by 1.0 percent in June following a 1.3 percent increase in May. Seventeen of the twenty metro areas saw monthly price growth.

"While the numbers are upbeat, other more recent data on home sales and mortgages point to fewer gains ahead," said David M. Blitzer, Chairman of the Index Committee at Standard & Poor's.

However, Blitzer added, "Even with concerns about near term developments, we recognize that the housing market is in better shape than this time last year."

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