Can Home Prices Keep Rising?
While Monday’s report of pending home sales issued by National Association of Realtors showed uneven progress in the housing market, the rise in home prices for the month of November provided a sign that the sector is recovering.
Home prices have increased for ten consecutive months. Standard & Poor’s Case-Shiller composite index of 20 metropolitan areas met analysts’ expectations with a 0.6 percent gain for the month of November. The rise contributed to a 5.5 percent gain year-over-year, the greatest yearly price increase since August 2006. However, at that time, housing prices were on a downward trajectory. Now, prices appear to be moving upward, and last year’s gains testify that the housing sector is on the mend.
Previously, the longest run of price increases came in 2009 and 2010, when the homebuyer tax credit prompted gains for nine straight months…
With rising prices and tightening inventory, the housing market was a “bright spot” for the economy in 2012, as Reuters reported. Even with continuing foreclosures and tighter credit, the sector is expected to boost economic growth this year as well. “This is continuing a trend in place for the better part of a year,” RBS economist Omair Shari told the publication. “This is another indication that the housing rebound is fairly entrenched at this point.”
Detroit, Minneapolis, Pheonix, and San Francisco posted the highest gains year-over-year, with increases in home prices surpassing 10 percent. But New York reported a negative annual change, the only metropolitan area to see such a drop.
Although the results were a positive indicator for the economy, they were tempered by a drop in consumer confidence. Data from The Conference Board revealed on Tuesday that Americans became more concerned about the economic outlook and their own financial prospects in January, pushing down the index of consumer attitudes to its lowest level in more than a year.