The US Department of Housing and Urban Development expects home prices to rise as early as the third quarter of 2011, as the number of foreclosures has begun to decline, increasing the quantity of homes available on the market.

 “It’s very unlikely that we will see a significant further decline,” said HUD Secretary Shaun Donovan in an interview with CNN. “The real question is when will we start to see sustainable increases. Some think it will be as early as the end of this summer or this fall.”

He added that home sales grew in six of the last nine months, and the number of defaulting home owners is shrinking. This means now is a good time to buy, as houses are more affordable at the moment. As of April, 1.7 million homes were in the foreclosure process -- down 18% from the peak as more of the houses were sold. 

Source: Bloomberg