Economy, Real Estate | featured news

U.S. home prices in the second quarter rose from the year-ago period for the first time since 2007, according to a closely watched index, the latest indication that the housing market is starting to recover.

Groundbreaking on new homes rose in June to its fastest pace in over three years, lending a helping hand to an economy that has shown worrisome signs of cooling. The Commerce Department said on Wednesday that housing starts rose 6.9 percent last month to a seasonally adjusted annual rate of 760,000 units. That was the highest rate since October 2008.

Confidence among U.S. homebuilders is swelling to a five-year high, with many now anticipating that sales of new homes will strengthen this year even as signs point to a slowing economy.

The International Monetary Fund lowered its estimates for economic growth for 2012 and 2013, and urged policy makers to do more to help the housing sector in the United States.

Contracts to purchase previously owned U.S. homes matched a two-year high in May, fueling optimism the housing market is poised for a recovery.

New single-family home sales surged in May to a one-year high and prices rose from a year ago amid tightening supply, further signs the housing market was gaining some momentum.

home resales fell in May and the median sales price rose only because of a drop in sale of lower priced homes, casting a shadow on the country's nascent housing market recovery.

U.S. builders started work on more single-family homes in May and requested the most permits to build homes and apartments in three and a half years. The increase suggests the housing market is slowly recovering even as other areas of the economy have weakened.

Home resales rose in April to their highest annual rate in nearly two years and a falloff in foreclosures pushed prices higher, hopeful signs for the country's economic recovery.

The relentless decline in home prices is nearing an end and prices should rise for the first time in seven years in 2013, but a possible new wave of foreclosures could threaten the recovery, according a Reuters poll of economists.