Home Prices Rise in Most Major U.S. Cities for First Time in 7 Months

Homes for saleBy CHRISTOPHER S. RUGABER

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% in March, compared the same month last year. That's better than the 3.5% 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% 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% to 8.1% 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.

Increase your money and finance knowledge from home

How Financial Planners go Grocery Shopping

Learn to shop smart and save.

View Course »

Investing in Real Estate

Learn the basics of investing in real estate.

View Course »

Add a Comment

*0 / 3000 Character Maximum

27 Comments

Filter by:
Robert & Lisa

House prices rising, incomes falling. Have you had enough of Obama and his Chicago thugs yet?

May 31 2012 at 6:19 AM Report abuse rate up rate down Reply
madlyfem

The Banks have plenty of money to lend, and the loans are insured. They make more money by playing the market with OUR money, gambling. That is how that Bank just lost $ 3 Billion, and it was one of the better Banks. We have to re-regulate the banks, and split off the savings banks (community), from the investment (gambling) Banks. That is the way it used to be. We don't want them to be able to keep gambling with OUR money. If some of them want to gamble (investment banks), let the people who want their money used that way, put their money there, and make a lot of money when they win, and lose it when they don't. Then there will be no Banks that are Too Big To Fail.

May 29 2012 at 11:42 PM Report abuse -1 rate up rate down Reply
evd10

Housing prices will not increase appreciably until first-time home buyers with little to put down again have access to easy credit. The banks were badly burned and it may be awhile before they open up the spigot. They have very little incentive to originate mortgages at today's interest rates.

May 29 2012 at 10:51 PM Report abuse +1 rate up rate down Reply
gmydogbud

Home Values have come down HOWEVER - Property TAXES, have gone UP. Live in a state that has gambling and we were told that allowing gambling would bring property taxes down however as with everything else in politics - that was a LIE! Politicans are so quick to give everything away however it is on the backs of the homeowners!!

May 29 2012 at 9:50 PM Report abuse +1 rate up rate down Reply
DENNIS

amazing -- just read an article saying that home prices were down. Wish they would make up their minds.

May 29 2012 at 8:14 PM Report abuse +2 rate up rate down Reply
1 reply to DENNIS's comment
jdykbpl45

This is the world of Huff n puff. The crack funes delete reality.

May 30 2012 at 11:35 AM Report abuse +1 rate up rate down Reply
a1putwins

misleading story. overall housing prices down 2.6%....and slightly up for the cities hardest hit by the crash in prices. When you look at a slight increase you have to realize that the slight uptick means nothing considering how far prices have fallen....

May 29 2012 at 5:46 PM Report abuse +4 rate up rate down Reply
Somey

The state of Hawaii has confirmed the legitimacy of Obama's birth certificate.

May 29 2012 at 5:38 PM Report abuse -4 rate up rate down Reply
1 reply to Somey's comment
democracks0

I bet that gets that tingling feeling running up your leg. Doesn't it Somehole.

SIMP!

May 29 2012 at 6:31 PM Report abuse +3 rate up rate down Reply
Somey

Improving Housing market = victory for Obama

May 29 2012 at 5:26 PM Report abuse -3 rate up rate down Reply
2 replies to Somey's comment
democracks0

Obamas a fiasco.

The housing market isn't improving. Obamites like to pretend it is.

May 29 2012 at 6:32 PM Report abuse +5 rate up rate down Reply
2 replies to democracks0's comment
nightsanime

besides they wont believe it unless fox news says it anyway lol

May 29 2012 at 8:05 PM Report abuse -2 rate up rate down
democracks0

nightsanime is an Obamite who has a severe case of Foxophobia and like many liberals thinks Fox News rules the world. LMAO

May 29 2012 at 10:03 PM Report abuse +2 rate up rate down
DENNIS

having been real estate for 30 years, this is nothing. Lets see 6 months of increases then we can talk. One month is just a fluke. meaningless story.

May 29 2012 at 8:08 PM Report abuse +3 rate up rate down Reply
viking9343

This whole housing bubble is a scam.

Headlines read "Home Foreclosures at record highs". Jimmy Carter Part Deux is wringing his hands saying oh, those poor unfortunate homeowners being kicked out of their homes....Waaaaaaa.

The truth is 75% of the foreclosures are shady investors walking away from their get rich quick scheems, buying homes and renting them out. The other 25% had no business whatsoever speculating in buying real estate and lied their azzes off to phony up the loan doc just to qualify.

The bad part is we all pay for dumb peoples mistakes.

The bottom line is save your money, put down a good downpayment, don't buy more then you can afford and just make your payments. Keep the idiot government out of housing and everything will be fine.

May 29 2012 at 3:24 PM Report abuse +4 rate up rate down Reply
1 reply to viking9343's comment
Somey

You're a little out of touch with reality.

May 29 2012 at 6:06 PM Report abuse -5 rate up rate down Reply
1 reply to Somey's comment
democracks0

Somehole for you to accuse anyone of being out of touch with reality is funnier then h&ll. You live in an Obamite fantasy world and still chant yes we can and still believe in hoax and change. LMAO

May 29 2012 at 6:36 PM Report abuse +4 rate up rate down
rayovak00

Impeach the muslim

May 29 2012 at 2:47 PM Report abuse +5 rate up rate down Reply
1 reply to rayovak00's comment
nightsanime

Dream on! ...and enough lies calling him muslim some cons are actually dumb enough to believe you.

May 29 2012 at 8:03 PM Report abuse -3 rate up rate down Reply