New York: US 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 has showed.
The S&P/Case Shiller composite index of 20 metropolitan areas gained 0.7 per cent in October on a seasonally adjusted basis, stronger than the 0.5 per cent 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 pick up in the sales of foreclosed and distressed properties and reduced buying investors and speculators.
Prices in the 20 cities rose 4.3 per cent year over year, beating expectations for a rise of 4.0 per cent.
Las Vegas posted the biggest monthly rise on a seasonally adjusted basis at 2.4 per cent, followed by a 1.7 per cent increase in San Diego, the latest Case-Shiller data showed.
“Higher year-over-year price gains plus strong performances in the south-west and California, regions that suffered during the housing bust, confirm that housing is now contributing to the economy,” Blitzer said.
Housing contributed 10 per cent to the overall US economic growth in the third quarter, while the sector represented less than 3 per cent of GDP, he said.
Last week, the government said US GDP expanded at a stronger than expected 3.1 per cent annualised 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 per cent, followed by a 1.4 per cent fall in Boston.