Home prices rose in ninth straight month: S&P

NEW YORK Wed Dec 26, 2012 9:50am EST

New housing construction is seen in Darnestown, Maryland, October 23, 2012. REUTERS/Gary Cameron

New housing construction is seen in Darnestown, Maryland, October 23, 2012.

Credit: Reuters/Gary Cameron

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NEW YORK (Reuters) - Single-family home prices rose in October for nine months in a row, reinforcing the view the domestic real estate market is improving and should bolster the economy in 2013, a closely watched survey showed on Wednesday.

The S&P/Case Shiller composite index of 20 metropolitan areas gained 0.7 percent in October on a seasonally adjusted basis, stronger than the 0.5 percent rise forecast by economists polled by Reuters.

"Looking over this report, and considering other data on housing starts and sales, it is clear that the housing recovery is gathering strength," David Blitzer, chairman of the index committee at Standard & Poor's, said in a statement.

While record low mortgage rates and modest job growth should keep the housing recovery on track, analysts cautioned home prices face downward pressure from a likely pickup in the sales of foreclosed and distressed properties and reduced buying investors and speculators.

Prices in the 20 cities rose 4.3 percent year over year, beating expectations for a rise of 4.0 percent.

Las Vegas posted the biggest monthly rise on a seasonally adjusted basis at 2.4 percent, followed by a 1.7 percent increase in San Diego, the latest Case-Shiller data showed.

"Higher year-over-year price gains plus strong performances in the Southwest and California, regions that suffered during the housing bust, confirm that housing is now contributing to the economy," Blitzer said.

Housing contributed 10 percent to the overall U.S. economic growth in the third quarter, while the sector represented less than 3 percent of gross domestic product, he said.

Last week, the government said U.S. GDP expanded at a stronger-than-expected 3.1 percent annualized pace in the third quarter.

Excluding seasonal factors, however, home prices in 12 of the 20 cities fell in October from September as home values tend to decline in fall and winter, Blitzer said.

Chicago experienced the largest non-seasonally adjusted decline at 1.5 percent, followed by a 1.4 percent fall in Boston.

(Reporting by Richard Leong; Editing by Chizu Nomiyama)

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Comments (8)
TommyPaine wrote:
It’s now almost January. The figures for housing prices released today reflect the economic reality two months ago, before the Fiscal Cliff scare started impacting markets. For example, retail sales have been tanking compared with their October levels. So these figures today are pretty useless. It is astonishing that it takes 2 months to gather this data.

Dec 26, 2012 9:14am EST  --  Report as abuse
totherepublic wrote:
It does not take 2 months to gather the data. It takes two months to strategically release it to gain the optimal benefit for the current regime. Like the week of the last ditch effort to convice some one (not me) to buy obama’s fiscal plan. If they released info for Nov or even so far this month…”well it would not look good”.

Dec 26, 2012 11:05am EST  --  Report as abuse
ConradU812 wrote:
“U.S. holiday retail sales this year were the weakest since 2008, when the nation was in a deep recession.”

-Marshal Cohen, chief research analyst at the market research firm NPD Inc.

Dec 26, 2012 12:00pm EST  --  Report as abuse
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