SLIGHT RISE IN US HOUSING PRICES CHEERS SOME BUT MANY REMAIN AFRAID

       The worst US housing market since the Great Depression may by on the mend after prices rose in 18 of 20 US cities in June, existing home sales hit a two-year high, and new home sales gained for a fourth consecutive month.
       "The sense that something is changing is definitely in the air," said Robert Shiller, the Yale University professor who, with economist Karl Case, created home price indexes in the 1980s now used by Standard Poor's.
       "After three years of decline, we might be seeing a turnaround."
       Lower home prices and government stimulus efforts have spurred demand and pared the supply of existing homese to the fewest in two years, while sednding new-home inventory to a 16-year low.
       Real estate sales buttress consumer spending, which accounts for about 70 per cent of the economy, because new owners tend to buy appliances, drapes and furniture.
       The S&P/Case-Shiller home-price index, which tracks 20 metropolitan areas, showed a gain in 18 cities during June, according to the recent report.
       Detroit and Las Vegas were the only two that declined. The Federal Housing Finance Agency national index showed a 0.5-per-cdnt increase during June with increases in five out of nine US regions, according to a government report.
       "Evidence is mounting that the worst of the economic downturn is behind us, "Federal Reserve Bank of Atlanta president Dennis Lockhart said on Thursday in a speech in Chattanooga, Tennessee. "The beginning stages of recovery are underway."
       Other federal officials are less optimistic.
       The jobless rate, which hit 9.5 per cent in June before dipping to 9.4 per cent by the end of the year, according to an Aug. 25 report by the White House Office of Management and Budget.
       "While the danger of the economy immediately falling into a deep recession has receded, the American economy is still in the midst of a serious economic downturn," the report said.
       About 26 per cent of US homes with a mortgage were worth less than the amount owed, according to a Deutsche Bank report this month.
       Deutsche Bank analysts Karen Weaver and Ying Shen forecast that as prices drop through the first quarter of 2011, as many as 48 per cent of mortgages may be "underwater".
       That means few homeowners will be able to refinance or take home equity loans to get cash.

       "After three years of decline, we might be seeing a turnaround."