United States: Home prices rise for fifth consecutive month
October 30, 2012
In August, the unadjusted S&P/Case-Shiller 20-city home price composite index increased 0.9% over the previous month. The figure followed the 1.6% rise registered in July and overshot market expectations of a 0.7% increase. The figure marks the fifth consecutive rise in the index, in which home prices have gained an accumulated 8.5%. On an annual basis, home prices are 2.0% above the same month last year, which is up from the 1.2% annual rise recorded in July and represents, in fact, the largest gain in annual terms in two years. In addition, the reading marks the third consecutive month with an increase in annual terms, after home prices remained in negative territory for 20 consecutive months. 17 of the 20 cities surveyed posted gains over the same month last year. That said, despite the improvement seen in recent months, home prices still remain 29.2% below the peak reached in July 2006. According to S&P, "The sustained good news in home prices over the past five months makes us optimistic for continued recovery in the housing market", while adding that "news on home prices confirms other good news about housing. Single family housing starts are 43% ahead of last year's pace, existing and new home sales are also up, the inventory of homes for sale continues to drop and consumer mortgage default rates are reaching new lows. Further consumer confidence continues to rise. Even as we end the seasonally strong home buying period, the statistics are positive."