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By Lynn Adler
NEW YORK, June 29 U.S. single-family home
prices unexpectedly climbed in April from March, driven by a
final sales push before tax credits expired, but signs of a
sustained recovery have yet to emerge, Standard & Poor's/Case
Shiller home price indexes showed on Tuesday.
"Inventory data and foreclosure activity have not shown any
signs of improvement," David Blitzer, chairman of S&P index
committee, which publishes the price indexes. "Consistent and
sustained boosts to economic growth from housing may have to
wait to next year."
The S&P composite index of home prices in 20 metropolitan
areas for April rose 0.4 percent on a seasonally adjusted
basis, surprising economists who had forecast a 0.1 percent
decline in a Reuters survey.
For March, the seasonally adjusted index was was downwardly
revised to a 0.2 percent drop, compared with unchanged
On an unadjusted basis, prices gained 0.8 percent in April
following March's 0.5 percent drop. A 0.2 percent rise was
forecast in a Reuters poll.
The 20-city index rose 3.8 percent in April from a year
earlier, topping the expected 3.4 percent increase.
See related graphic: link.reuters.com/qas74m
"Most of it could be attributable to the (federal) tax
credit, which pulled forward demand. Now demand is falling
away," said Kevin Logan, chief U.S. economist at HSBC
Home sales have fallen precipitously in the the weeks since
the April 30 end of tax credits of up to $8,000, which pushed
sales forward as buyers raced to lock in the incentive.
Other reports have shown sales of new homes sank by a
record 32.7 percent in May to the lowest level since record
keeping began in the early 1960s, and existing home sales
unexpectedly fell 2.2 percent in May.
Applications to buy homes hover at 13-year lows.
The tax credit fired up sales but also boosted inventory,
adding to supply pressures already in place from record
"People have been listing their houses as the tone of the
market has improved," said Pierre Ellis, senior economist at
Decision Economics. "That may tend to limit price increases,"
and housing stability is critical for consumer spending, given
stock market uncertainty.
Unemployment also remains stubbornly high at 9.7 percent
and lending standards are tight, making homeownership
unattainable for many borrowers.
Still, affordability is high, with prices down around 30
percent on average from 2006 peaks and mortgage rates touching
record lows near 4-3/4 percent.
Home prices in April were at levels similar to late summer
and early autumn of 2003, S&P said.
The tax credit-driven gains in April spurred month-to-month
increases in 18 cities, compared with six in March. Only Miami
and New York saw price erosion last month -- 0.8 percent and
0.3 percent, respectively.
Prices rose by at least 1 percent in 11 of the metro areas
in April from March. New York posted a new cyclical low and has
now fallen 21.7 percent from the June 2006 peak.
(Additional reporting by Richard Leong and Ellen Freilich,
Editing by W Simon )
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