Several studies have revealed the fact that home prices have increased in present times (2nd quarter of 2009). As per the latest Case-Shiller Report, home prices have increased by 2.9% in the 2nd quarter of 2009. The prices in the National Index have decreased by 15.9% in comparison to the price in the 2nd quarter of 2008. However, it is relatively better than 19.1% decline, which was prevalent in the first 3 months of 2009. According to the finance market experts, this is the first sign of improvement in 3 years and it is expected to positively affect the home finance market as well.

Reasons behind the home price upswing:

A number of factors have contributed to the increase in home prices in the 2nd quarter of 2009. Apart from home prices becoming quite affordable, several economic incentives have also helped the housing market to rebound. Among these incentives, first time homebuyers tax credit worth $ 8000 requires a special mention. This tax benefit has encouraged many first time buyers to go for homeownership. It has been noticed that buyers are eager to buy homes before the prices go up. This factor has encouraged them much more to buy homes rather than taking advantage of first-time homebuyers tax credit.

A caution against the current upswing:

In spite of the positive report, Robert Shiller (principle author of the Case-Shiller index) has expressed caution. He has reminded that the home prices were falling by 3% a month in the year 2008. However, the condition improved a bit and the industry experts expected that the housing market as well as the home finance market would turn around in some time; but, they were proved wrong in a short while, when the home prices started decreasing at an alarming rate. According to Shiller, the same condition can happen once again in 2009. People are keen to buy homes; however, high unemployment rate may prevent them to go for homeownership.

However, according to Stuart Hoffman, the chief economist for PNC Financial Services Group, this is a favorable time for the buyers and the current housing market as well as the home finance market will continue to favor the buyers for some more time.

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