Home prices kept rising in July across the United States, buoyed by greater sales and fewer foreclosures. 
 
 National home prices increased 1.2 percent in July, compared to the same month last year, according to the Standard & Poor's/Case Shiller index released Tuesday. That's the second straight year-over-year gain after two years without one. 
 
 The report also says prices rose in July from June in all 20 cities tracked by the index. That's the third straight month in which prices rose in every city. 
 
 Steady price increases and record-low mortgage rates are helping drive a housing recovery. 
 
 In the 12 months ending in July, prices have risen in 16 of 20 cities. In Phoenix, one of the cities hardest hit by the housing bust, prices are up 16.6 percent in that stretch. Prices in Minneapolis and Detroit have risen more than 6 percent. 
 
 "We are more optimistic about housing," David Blitzer, chairman of the S&P's index committee. "Stronger housing numbers are a positive factor for other measures, including consumer confidence." 
 
 Prices fell from a year earlier in Atlanta, Chicago, New York and Las Vegas. 
 
 The S&P/Case-Shiller index covers roughly half of U.S. homes. It measures prices compared with those in January 2000 and creates a three-month moving average. The July figures are the latest available. 
 
 Home prices are still 30 percent below their peak in June 2006, according to Case-Shiller. That was the height of the housing boom. 
 
 Other measures of home prices are also showing steady gains. CoreLogic, a private real estate data provider, said earlier this month that prices rose in July from a year earlier by the most in six years. And a federal government housing agency has also reported annual increases. 
 
 Rising home prices are one of many signs that the housing market is slowly recovering. 
 
 Sales of previously occupied homes jumped in August to the highest level since May 2010. Builder confidence is at a six-year high and construction of single-family homes rose last month to the fastest annual rate in more than two years. Even with the gains, home sales and construction remain well below healthy levels. 
 
 The broader economy is likely to benefit from rising home prices. When home prices rise, people typically feel wealthier and spend more. And more Americans are likely to put their houses up for sale, which could further energize the market. 
 
 Home sales have been bolstered by the lowest mortgage rates on record. The average rate on the 30-year fixed mortgage touched a record low of 3.49 percent last week and has been below 4 percent all year. A limited supply of homes has also helped drive prices higher. 
 
 Prices are also rising because of a decline in foreclosures and sales of other deeply discounted homes. Many homes in the foreclosure process will likely come on the market in the coming months, which could drag on prices. 
 
 Still, many Americans, particularly first-time homebuyers, are unable to qualify for a mortgage or can't afford larger down payments required by banks. That's holding back sales. 
 
 Home sales could get a further boost from the Federal Reserve. The Fed said two weeks ago that it would purchase $40 billion of mortgage-backed securities each month until the economy and hiring improve substantially. That's likely to keep mortgage rates at record-low rates for some time. ||||| Advertisement Continue reading the main story 
 
 
 
 
 
 
 
 Just as the economy is finally beginning to strengthen, the real estate market is showing new signs of deterioration. 
 
 Prices slipped in many cities in October, new figures show, despite low mortgage rates and a generous tax credit meant to spur sales. Now rates are starting to rise, making it harder for many buyers to afford a house, and the tax credit seems to be losing its capacity to lure them into the market. 
 
 The renewed worries about housing come against a backdrop of improvement in the broader economy. Surveys suggest consumers are growing more confident. That better mood probably helped improve holiday retail sales. The number of people joining the ranks of the jobless is dwindling, while the hiring of temporary workers is up, a traditional harbinger of recovery. 
 
 Still, economic growth for the third quarter was more modest than originally reported; it was revised down to an annual rate of 2.2 percent from 2.8 percent. Many economists are fretting that housing could drag down the tenuous recovery. 
 
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 “I’m worried. Everyone’s worried,” said Karl E. Case, the Wellesley College economist who helped design the housing index that provided fresh cause for alarm on Tuesday. “If prices sink 15 percent from here, which is a possibility, and the 2008 and 2009 loans go bad, then we’re back where we were before — in a nightmare.” 
 
 The figures released Tuesday showed that the Standard & Poor’s/Case-Shiller home price index, a widely watched measure of housing markets in 20 metropolitan areas, rose 0.4 percent in October from the previous month on a seasonally adjusted basis. 
 
 It was the fifth consecutive month that prices were up, but the rate of increase has dropped sharply from the impressive gains of the summer. Prices in nine of the 20 cities were flat or down. 
 
 Some analysts see little cause for alarm. Dan Greenhaus of Miller Tabak said that if prices fell “a bit further” it would sop up some of the excess inventory still weighing on the market. 
 
 But others said that the Case-Shiller index showed an increase only because each report is an average of the preceding three months, meaning the strong August market was still a component of the October report. Another factor supporting the index is the seasonal adjustments, which tend to hide any weakness in the cooler months as the pace of home-buying slows. 
 
 On an unadjusted basis, the index was flat. A different housing price index, compiled by the research firm LoanPerformance, fell 0.7 percent in October. 
 
 Mr. Case, who chided himself for his optimism over the summer, said he now believed “the probability is very high of a serious double dip like 1982.” 
 
 The federal government has mounted an extensive and expensive effort to repair housing. While these actions undoubtedly staved off a total collapse, they are showing signs of fatigue. 
 
 The tax credit for first-time buyers has been extended until next spring, but the urgency that buyers showed this summer, when they believed the credit was about to end, has drained away. The Federal Reserve has intervened in the market to push 30-year mortgage rates to the lowest level in decades, but says that program will end by March 31. Rates have already crept back above 5 percent. 
 
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 Fannie Mae and Freddie Mac, the government-controlled mortgage giants, are tightening policies for loans in their portfolios. Lenders who sell their mortgages to Fannie and Freddie are becoming more skittish about extending credit. 
 
 The Federal Housing Administration, which has become an important part of the entry-level housing market, is expected to tighten its standards in the next few weeks. That would further crimp the pool of eligible buyers. 
 
 Faramarz Moeen-Ziai of Bank of Commerce Mortgage in San Ramon, Calif., said many of his clients were struggling to complete deals. “All this is adding to the downward pressure on prices,” he said. 
 
 Falling prices are in theory good for buyers. Some housing commentators say prices need to fall much further before houses will be truly affordable. But the drop over the last three years, however necessary, has caused tremendous damage to wallets and to the lubricant of commerce, confidence in the future. 
 
 Falling prices have put as many as a quarter of mortgage holders under water, where the loan balance is greater than the amount the home would fetch. If they lose their jobs, they have little choice but to opt for foreclosure. In a vicious circle, every new foreclosure puts more pressure on the housing market. 
 
 Neree Dastous, a 39-year-old firefighter in a San Francisco suburb, would like to move from his condominium into a three-bedroom house. But the condo is under water, so he cannot sell. Keeping it as a rental pushes his debt-to-income ratio above the new Fannie Mae guidelines. Interest rates are not helping, either. 
 
 “Anything I can afford, I wouldn’t want my kids to live in,” Mr. Dastous said. “I need prices to come down, but if they do the value of my condo goes down, too. It’s very complicated.” 
 
 Mr. Case, the Wellesley economist, said he was heartened by the minimal pace of housing starts by builders and the exuberant sales volume of existing houses. These two forces should ultimately clear the backlog in the market and prop up prices. 
 
 Yet for now, prices in many cities are weakening. “There’s no historical data for falling house prices” on such a scale, he said. “We don’t know how this ends.” 
 
 While the Case-Shiller index has managed gains for the last several months, it is still down 7.3 percent from October 2008 and is off 29.5 percent from its peak. Some analysts predict prices will fall as much as an additional 10 percent. That could swiftly undermine consumers’ frail confidence. 
 
 The Conference Board reported Tuesday that the consumer confidence index increased in December to 52.9 from a revised 50.6 in November. In February, when talk of another Depression was rife, the index was at 25.3. 
 
 “Part of the reason people are turning more optimistic is a perception that the real estate market has turned,” said Joshua Shapiro, chief United States economist for MFR. “If that proves to be false, and we think it will be, it is going to come as a surprise to many.” 
 
 Mr. Dastous, the foiled buyer, is already deeply disappointed. He is exploring foreclosures and fixer-uppers, but has no confidence he and his family will be able to move any time soon. 
 
 Housing bloggers have given a name to this phenomenon: house arrest.
– Consumer confidence soared to a seven-month high, flying far above analyst expectations, according to a Conference Board report released today. The board's index came in at 70.3, up from 61.3 a month earlier. That's a whole heck of a lot better than the 63 that the economists Reuters polled had expected. That wasn't the only good economic news on the day either. Home prices increased 1.2% in July compared to a year earlier, according to an S&P/Case Shiller index report. It's the second straight year-over-year increase—after two years without a gain, the AP reports. Prices rose in 16 of the 20 cities surveyed. Hard-hit cities saw especially big gains; Phoenix saw homes shoot up 16.6%.