According to Standard & Poors/Case-Shiller index, residential prices in the US increased by +0.45% between April and May, which is its first monthly increase in almost three years.

However, the main index reported a -17.06% drop in house prices in the 20 major urban areas it covers, on a year-on-year basis in the month of May. Although the year-on-year decrease remains a significant fall, it was the fourth month in a row that the pace of annual decline slowed, suggesting the market may have bottomed out.

The Case-Shiller index came after a US Government report showed a +11% increase in new home sales in June. However the mood in the housing market – an important barometer of the US economy – does not appear to be translating into the wider economy.

The latest Conference Board index of consumer confidence fell by more than expected in July to 46.6 from 49.3 in June, on a 0-100 scale whereby anything above 50 is positive.

It was the second consecutively monthly fall for the index, which sunk to an all-time low in February.