Daily Briefing

WASHINGTON - U.S. home prices rose slightly in July from a month earlier, according to a government index, further evidence that the housing market is stabilizing. The Federal Housing Finance Agency said Tuesday prices rose 0.3 percent in July from the prior month, but June's price increase was revised down to 0.1 percent from 0.5 percent. The index is still 4.2 percent below last year's levels and 10.5 percent off its peak from April 2007. It is based on loans owned or guaranteed by mortgage finance companies Fannie Mae and Freddie Mac. The index has declined less than other housing market measurements because it excludes the most expensive homes and some of the subprime loans that have fallen into foreclosure. The report "supports other evidence that the three-year long decline in prices has come to halt," Paul Dales, U.S. economist with Capital Economics, wrote in a note to clients. But he cautioned that "rising foreclosures and the fragile economic environment suggest that further gains in prices will be modest and patchy."

- Associated Press

FDIC weighs extraordinary steps to shore up fund

WASHINGTON - The Federal Deposit Insurance Corp. is weighing several costly - and never-before-used - options as it struggles to shore up the dwindling fund that insures bank deposits. The agency is considering borrowing billions from healthy banks. Alternatively, it may impose a special fee on the banking industry. A third option - borrowing from the Treasury - is politically unpalatable, since it would resemble another bailout. A fourth option would be to have banks pay their regular insurance premiums early. But that wouldn't solve the fund's long-term cash needs. The FDIC is expected to propose a solution at a board meeting next week. Bank failures since the financial crisis struck have drained the fund, which insures bank deposit accounts of up to $250,000, to its lowest level since 1992.

- Associated Press