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TORONTO, ONTARIO--(Marketwire - Aug. 28, 2012) - Higher equity and home values are providing some much-needed comfort to U.S. consumers, according to BMO Economics, following the release of the S&P Case-Shiller home price index for June which showed a more-than-expected rise of 0.9 per cent, seasonally adjusted.

"This represented the fifth straight monthly gain, and lands the index 0.5 per cent above year-earlier levels - the first positive reading in nearly two years," said Jennifer Lee, Senior Economist, BMO Capital Markets. "This report is very good news, and shows that prices are getting support from the pickup in demand for housing as well as fewer distressed homes on the market. It also represents a much-needed boost given the release of today's consumer confidence index for August, which shows a drop of 4.8 points."

A look at individual areas provided further encouragement, according to Ms. Lee. "Eighteen of the 20 metro areas saw home prices rise in June, the most since 2006. On a year-over-year-basis, 13 areas are now able to say that home prices have grown, including Phoenix, Miami and Minneapolis."

Ms. Lee noted that U.S. housing prices are likely to stabilize further in 2013, with demand improving on firmer job growth and easier lending standards. The improving real estate market could start to attract more attention from Canadians.

According to a BMO survey:

• Nearly two-in-ten (16 per cent) Canadians would consider purchasing a home south of the border
• Half (56 per cent) would do so to gain a vacation or secondary property, while 44 per cent cite affordability and one-third its attractiveness as a long-term investment (29 per cent)

"Canadians looking to buy U.S. property should consider partnering with a U.S. financial institution, preferably a Canadian-based bank with branches south of the border, to finance the new purchase," said Laura Parsons, BMO Mortgage Expert. "For real estate, having expertise at the local level is always the best approach, as conditions and trends can vary drastically from one location to the next."

Ms. Parsons noted that BMO customers can visit a BMO Harris Bank branch in the U.S., which has locations in Illinois, Indiana, Arizona, Florida, Minnesota, Missouri, Kansas and Wisconsin. "Having a Canadian partner can provide a clear understanding of the differences between Canadian and U.S. financing, which can save a lot of time and headache during the home buying process," added Ms. Parsons.

About BMO Financial Group

Established in 1817 as Bank of Montreal, BMO Financial Group is a highly diversified North American financial services organization. With total assets of $542 billion as at July 31, 2012, and more than 46,000 employees, BMO Financial Group provides a broad range of retail banking, wealth management and investment banking products and solutions.