US house prices rise, but clouds loom

WASHINGTON: US home prices rose in the second quarter of the year, rebounding from lows seen during the sub-prime crisis, but with ominous signs for the future, data showed Tuesday.

The Standard & Poor's/Case-Shiller survey showed house prices grew 4.4 percent during the second quarter of 2010 and were 3.6 percent above their year-earlier levels.

But experts expressed concern that the evaporation of government tax breaks for homebuyers and weak demand could weigh on prices in future.

"While the numbers are upbeat -- the worry starts when you remember that the Homebuyers' Tax Credit has expired, foreclosures are still at high levels, and July data on home sales and starts were very, very weak," said David Blitzer, who runs the index for Standard & Poor's.

He also warned that continued sluggish demand for home sales would likely filter through to weaker prices.

Home prices have a knock-on effect across the economy from consumer confidence to spending.