New housing construction is seen in the Briar Chapel community near Chapel Hill, N.C., Aug. 17, 2009. The National Association of Home Builders says its housing market index rose in August to the highest point in more than a year.
New housing construction is seen in the Briar Chapel community near Chapel Hill, N.C., Aug. 17, 2009. The National Association of Home Builders says its housing market index rose in August to the highest point in more than a year. Gerry Broome/AP
Housing prices rose for the second month in a row in June, and consumer confidence is on the rise, according to two reports that signal the recession may be lifting.
In one report released Tuesday, the Standard & Poor's/Case-Shiller index of home prices found the price of single-family homes in 20 major cities rose 1.4 percent in June. It's the second monthly increase in a row for home prices, which had been falling every month for three years. Prices rose in June in 18 of the 20 cities tracked by the index.
Nationwide, housing prices inched upward not just month over month, but quarter over quarter. The national Standard & Poor's/Case-Shiller's housing index rose 2.9 percent in the second quarter from the January-March period — the first quarterly increase in three years. However, the quarterly home price index is still down 14.9 percent from last year.
Another report showed consumer confidence jumped in August.
The positive news came on the same day the government released projections showing unemployment will continue to rise to 10 percent this year, and the budget deficit will balloon to a record $1.6 trillion as the U.S. struggles to emerge from a severe recession.
The financial markets rose modestly on the positive consumer and housing news, though experts said consumer confidence is still below levels associated with a healthy economy.
"People's spending decisions depend more on whether they have money in their pocket than on how they feel," said Bill Cheney, chief economist at John Hancock Financial.
The New York-based Conference Board's consumer confidence index rose to 54.1 in August from 47.4 in July. It was a bigger jump than most analysts had forecast — but well below 90, the minimum figure that indicates people believe the economy is healthy.
The measure has become an increasingly important data point in recent years, with the U.S. relying ever more heavily on consumer spending as an engine of growth. It now accounts for nearly three-quarters of all economic activity.
The Board's "Present Situation Index" was up slightly on consumers' assessment of a better job market, despite White House predictions that jobs will remain scarce.
Last week, the National Association of Realtors said existing home sales increased for the fourth straight month as buyers rushed to take advantage of a first-time home-buyer tax credit that expires in November.
Improved home sales give economists hope that the country has moved past the worst of the recession.
The Commerce Department on Wednesday is set to report new-home sales for July. Analysts also expect that figure to rise.
NPR's Deborah Tedford and wire services contributed to this report