Home Prices Rise in Most Major US Cities
WASHINGTON (AP) - Home prices rose in March from February in most major U.S. cities for the first time in seven months. The increase is the latest evidence of a slow recovery taking shape in the troubled housing market.
The Standard & Poor’s/Case-Shiller home price index shows that prices increased in 12 of the 20 cities it tracks.
Three of the weakest markets reported signs of improvement. Prices increased in Tampa and Miami, while prices in Las Vegas were unchanged.
The biggest month-over-month increases were in Phoenix, Seattle and Dallas. Prices dropped the most in Detroit, Chicago and Atlanta.
Rising home prices in most cities adds to other encouraging signs for a housing rebound. Home sales are up, mortgage rates are at historic lows, builders are more confident and the economy is adding jobs.
Even though 12 cities showed gains, the weaker cities weighed on national home prices. The group’s 20-city index edged down to its lowest level since the housing bubble burst.
Still, home price declines have slowed and a majority of markets are on the rise.
"This is relatively good news," said David Blitzer, chairman of the index committee at S&P indices. "We just need to see it happen in more of the cities and for many months in a row."
The increases partly reflect the beginning of the spring selling season. The month-to-month prices aren’t adjusted for seasonal factors.
The S&P/Case-Shiller monthly index covers half of all U.S. homes. It measures prices compared with those in January 2000 and creates a three-month moving average. The March figures are the latest available.
Price declines are slowing over the past 12 months. The 20-city index dropped 2.6 percent in March, compared the same month last year. That’s better than the 3.5 percent year-over-year drop from February. And it’s the smallest annual drop since December 2010
Other measures of home prices have also shown gains. But the S&P/Case-Shiller index uses a three-month moving average, which means it could take longer to signal greater improvement.
"It might be the last of the closely followed home price figures to reflect a turning point," said Jonathan Basile, an economist at Credit Suisse.
In April, sales of both previously occupied homes and new homes rose near two-year highs. Builders are gaining more confidence in the market, breaking ground on more homes and requesting more permits to build single-family homes later this year.
Mortgage rates have never been lower. The average rate on the 30-year fixed mortgage fell to 3.78 percent last week - the lowest since long-term rates began in the 1950s.
Still, the pace of home sales remains well below healthy levels. Economists say it could be years before the market is fully healed.
Many people are having difficulty qualifying for home loans or can’t afford larger down payments required by banks. Some would-be home buyers are holding off because they fear that home prices could keep falling.
A better job market has also made more people open to buying a home. Employers have added 1 million jobs in the past five months, though the gains slowed in April and March. The unemployment has dropped a full percentage point since August, from 9.1 percent to 8.1 percent in April.
Economists predict 160,000 jobs were added this month, while the unemployment rate was unchanged. The government will report on May job growth Friday.