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TORONTO, ONTARIO--(Marketwire - Sept. 25, 2012) - The continuing rise of U.S. home prices is supporting consumer confidence, household finances and the economic outlook, according to a commentary by BMO Economics. The S&P Case-Shiller home price index rose 0.4 per cent in July, lifting the yearly rate to a near two-year high of 1.2 per cent.

"This represented the sixth straight monthly gain in the Index," said Sal Guatieri, Senior Economist, BMO Capital Markets. "All major price indexes are now rising in response to firmer demand and a shrinking supply of properties. This has positive implications for household confidence, wealth and spending, as well as for residential construction. Moreover, wary prospective buyers, who have watched prices fall more than 30 per cent since 2006, could be tempted to come off the fence."

Prices rose on a non-seasonally adjusted basis in all 20 cities observed in the Index, and in all but one on a seasonally adjusted basis. "Phoenix continues to lead the way with a 16.6 per cent increase over the past year, followed by Minneapolis at 6.4 per cent," noted Mr. Guatieri. Cities popular with Canadian snowbirds continued to show strong price growth, with Miami up 5.3 per cent and Tampa up 3.6 per cent.

The continued improvement in the U.S. 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 Illinois, Indiana, Arizona, Florida, Minnesota, Missouri, Kansas and Wisconsin. "A Canadian bank with a U.S. partner can provide you with 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.