Home » NEWS » Home prices continue to rise

Home prices continue to rise

Home prices rose for the seventh straight month in December, a sign of price stability as the U.S. housing market continues its bumpy road to recovery.

The Standard & Poor’s/Case-Shiller 20-city home price index released Tuesday rose 0.3 percent from November to December, to a seasonally adjusted reading of 145.87. The index was off 3.1 percent from December last year, nearly matching analysts’ estimates that it would fall by 3.2 percent.

Only five of 20 cities in the index showed declines from November to December. The index is now up more than 3 percent from its bottom in May, but still 30 percent below its May 2006 peak.

Los Angeles and Phoenix posted the largest price increases. The worst performer was Chicago with a 0.6 percent decline.

Rising prices are a key to the nation’s economic recovery because they make homeowners feel wealthier and more comfortable to spend money. Consumer spending accounts for more than two-thirds of all economic activity.

Price increases also help rebuild equity for homeowners who currently owe more on their mortgages than their properties are worth. Roughly one in three homeowners with a mortgage are now in that position, according to Moody’s Economy.com.

The housing market is seeking stability as it bounces back from a four-year recession. Sales of previously occupied homes fell almost 17 percent in December, the largest monthly drop in 40-years of record-keeping, the National Association of Realtors said. Data for January will be released Friday, with analysts forecasting a 1 percent rise.

Sales of newly built homes are expected to rise 5.3 percent in January, after declining sharply a month earlier. The Commerce Department will release new data on Wednesday.

On a quarterly basis, U.S. home prices fell 2.5 percent compared with the fourth quarter of 2008.

The Case-Shiller indexes measure home price increases and decreases relative to prices in January 2000. The base reading is 100; so a reading of 150 would mean that home prices increased 50 percent since the beginning of the index.

BEFORE YOU GO…

… we’d like to ask for your support. More people are reading the Mississippi Business Journal than ever before, but advertising revenues for all conventional media are falling fast. Unlike many, we do not use a pay wall, because we want to continue providing Mississippi’s most comprehensive business news each and every day. But that takes time, money and hard work. We do it because it is important to us … and equally important to you, if you value the flow of trustworthy news and information which have always kept America strong and free for more than 200 years.

If those who read our content will help fund it, we can continue to bring you the very best in news and information. Please consider joining us as a valued member, or if you prefer, make a one-time contribution.

Click for more info

About Megan Wright

Leave a Reply

Your email address will not be published. Required fields are marked *

*