July 3 (Bloomberg) -- Homes in the U.S. are the most affordable they’ve been in decades and prices may start to climb as soon as the third quarter, Housing and Urban Development Secretary Shaun Donovan said today.
“It’s very unlikely that we will see a significant further decline,” Donovan said today on CNN. “The real question is when will we start to see sustainable increases. Some think it will be as early as the end of this summer or this fall.”
Home sales have increased in six out of the past nine months and the number of property owners in default is declining, Donovan said on the “State of the Nation” broadcast. Housing prices will begin rising as the number of foreclosures declines, he said.
“In the long run, it’s a good time to buy,” Donovan said. “It’s so affordable today compared to where it’s been for generations.”
Contracts to buy previously owned U.S. homes rose 8.2 percent in May, following a revised 11 percent drop in the previous month, the National Association of Realtors said on June 29. A separate report by the Chicago-based group on June 21 showed sales of existing houses, which make up about 96 percent of the market, declined in May to a six-month low.
Home prices fell 4 percent in April from a year earlier, the biggest drop in 17 months for the S&P/Case-Shiller index of values in 20 cities.
--With assistance from Ashwin Seshagiri in New York. Editors: Ann Hughey, Steve Geimann
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