I was happy and surprised to see that the nominal S&P/Case-Shiller seasonally adjusted Home Price Index rose by 0.75% in June for a composite of 20 U.S. metropolitan areas.

Inflation- and seasonally-adjusted S&P/Case-Shiller Home Price Index for San Diego (red) and 10 major metropolitan areas (black). Calculated as seasonally adjusted Case-Shiller index multiplied by the ratio of the July 2009 CPI to that for the indicated date.

Let me explain first why I was surprised. I am expecting the unemployment rate to rise further, and feared that this plus the existing inventory of unsold homes would continue to put downward pressure on home prices.

Let me explain second why I see the increase in house prices as a favorable development. The key problem facing the financial sector has been the loss in the market value of securities

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By Bob Blandeburgo

Associate Editor

Money Morning

Prices for single-family and condominium homes in the second quarter fell by a record 15.6% and 19.8% year-over-year in the United States, mainly due to foreclosures.

While the data taken on a national average may be disheartening, the …

In the currency market, the dollar inched up against the euro. Late Thursday, the euro was trading at $1.4194 vs. $1.4214 on Tuesday. On the economic front, the National Association of Realtors (NAR) reported yesterday that resales of U.S. single-family homes and condos climbed 3.6% in June to a seasonally adjusted annual rate of 4.89 million, the highest level since October.

Meanwhile, the inventory of unsold homes on the market fell 0.7% to 3.82 million in June. This is reportedly a 9.4-month supply at the June sales pace, down from 9.8 months in May.

“The housing market appears to be healing,” said Lawrence Yun, the NAR’s chief economist. Yun said that inventories would have to be at a seven-month supply to get price stabilization. He said prices could stabilize “around the end of the year.”

The NAR report sparked a debate about whether the housing market has really turned a corner.

Some

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In the currency market, the dollar slipped against the euro. Late Tuesday, the euro was trading at $1.3141 vs. $1.3039 on Monday.

Traders were squaring long U.S. dollar positions ahead of Wednesday’s Fed decision and first-quarter GDP release, according to Michael Woolfolk, senior currency strategist at Bank of New York Mellon (NYSE:BK).

“The event risk of these events may limit appetite for fresh U.S. dollar exposures, with renewed U.S. dollar buying likely to resume if first-quarter GDP disappoints or the Fed announces further QE [quantitative easing] measures,” Woolfolk said.

The day’s numbers provided some support for an expansion of risk.

The Conference Board reported that its U.S. consumer confidence index jumped to a reading of 39.2 in April from 26.9 in March. The month-over-month gain was the fourth-largest ever in the 32-year history of the survey.

At the same time, Standard & Poor’s Case-Shiller home price index declined in February, as home

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