Home Prices Increase in Most Major U.S. Cities

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Home prices riseBy CHRISTOPHER S. RUGABER, AP Economics Writer

WASHINGTON (AP) - Home prices increased in September in most major U.S. cities, more evidence of a housing recovery that is providing a lift to the fragile economy.

Standard & Poor's/Case-Shiller reported Tuesday that its 20-city index of home prices rose 3 percent in September compared with the same month last year. Prices also gained 3.6 percent in the July-September quarter compared with the same quarter in 2011.

Across the nation, prices increased in 18 of 20 cities over the 12-month period. In Phoenix, prices jumped 20.4 percent over that stretch to lead all cities. Prices in Atlanta showed a modest 0.1 percent increase, ending 26 straight consecutive year-over-year declines.

Prices also rose in September from August in 13 cities. Five metro regions posted declines, while two were unchanged.

In Las Vegas, one of the hardest hit during the housing crisis, prices increased 1.4 percent - the biggest month-over-month gain. Prices rose 1.1 percent in Phoenix and Minneapolis. The largest decline was in Cleveland, where prices fell 0.9 percent.

Monthly prices are not seasonally adjusted, so some of the declines may signal the end of the summer buying period.

David M. Blitzer, chairman of the Case-Shiller index, said that when adjusting for seasonal factors, only one city showed a decline in September versus two in August. "Despite the seasons, housing continues to improve," Blitzer said.

The S&P/Case-Shiller index covers roughly half of U.S. homes. It measures prices compared with those in January 2000 and creates a three-month moving average. The September figures are the latest available.

Steady increases in home prices have helped drive a modest recovery in the housing market. Rising prices encourage more potential buyers to come off the sidelines and purchase homes. And more people may put their homes on the market as they gain confidence that they can sell at a good price.

Higher home prices can also make homeowners feel wealthier and more likely to spend more. Consumer spending accounts for about 70 percent of the U.S. economy.

A big reason for the rebound is that the excess supply of homes that built up before the housing crisis has finally thinned out. The number of previously occupied homes available for sale has fallen to a 10-year low. The inventory of new homes is also near the lowest level since 1963.

At the same time, more people are looking to buy or rent a home after living with relatives or friends during and immediately after the Great Recession.

Those trends are also pushing up home sales and construction. Sales of previously occupied homes are near five-year highs, excluding temporary spikes in 2009 and 2010 when a homebuyer tax credit boosted purchases.

Builders, meanwhile, are more optimistic that the recovery will endure. A measure of their confidence rose to the highest level in six and a half years this month. And builders broke ground on new homes and apartments at the fastest pace in more than four years last month.


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12 Comments

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Frankie

Not only did my home value go up but under the new assessment in my area, I now save $1k on property taxes next year. Woot!

November 28 2012 at 4:09 AM Report abuse +1 rate up rate down Reply
Larry

Whistling through the grave yard.

November 28 2012 at 2:35 AM Report abuse -1 rate up rate down Reply
areniartenisweet

How stupid you can be when you say prices are rising and it s a good sign the economy is getting better.
The prices has to be low when people can afford buying it and making easy payment.
Just think for a second. Just think. Everyone wants to sele their merchandise well in pricewise and no body wants to sale it cheaper. How can you afford buying? it is they too high and you want to get it in a low price, RIGHT?

November 28 2012 at 1:14 AM Report abuse rate up rate down Reply
vlady1000

I have seen a pretty sharp increase in price and demand in 2 of the 3 places I own property and the one place they have not gone up, they are holding steady.

November 27 2012 at 9:48 PM Report abuse rate up rate down Reply
drbuckles

Don't kid yourselves it's driven by speculation. Today in my paper they were helping people with a plan to give them $20,000 for a down payment. The public debt was at 100% of GDP in 2008, but has now dropped to 80% of GDP and It's moving very slowly as people pay down their debts and lose their homes. If they really wanted to help the homeowners they could have negotiated their principal down and freed up some capital but instead, Geithner, chose to allow the banks to drag their feet, and never intended to help the people out. This will be Obama's legacy but he has a chance to change it by putting someone in charge that will help the homeowners, and stimulate the economy at the same time. But the Republicans and the banking lobby will probably win the day, and his legacy will be firmly in place as history is written.

November 27 2012 at 7:56 PM Report abuse rate up rate down Reply
1 reply to drbuckles's comment
t_trevor2

Nothing could be more hilarious than the absurd references to "they".

Apparently, "they" is a magical sugar daddy whose responsibility it is to give free **** to the dumb ones!

November 27 2012 at 10:04 PM Report abuse rate up rate down Reply
wongtpa

We are still underwater because the the Democrats' Community Reinvestment Act. Obama and his democrats are to blame for lost equity. In some cases, people will not be able to retire for the loss of home equity. Obama and his moron followers are to blame.

November 27 2012 at 6:05 PM Report abuse -1 rate up rate down Reply
2 replies to wongtpa's comment
rikydavid3

ur the moron jerk,you no very little about wats going on.put the blame where it belongs.

November 27 2012 at 8:19 PM Report abuse rate up rate down Reply
1 reply to rikydavid3's comment
t_trevor2

Are you one of mily's illiterate acquaintances that he references below?

November 27 2012 at 10:14 PM Report abuse rate up rate down
t_trevor2

Indeed, social engineering designed to provide "affordable housing" is the primary culprit in the housing bust. The Community Re(mal)investment Act is no small part of that failed social engineering, but Fannie, Freddie, the FHA, the American Dream Downpayment Act, tax deductible mortgage interest, and a whole host of other goon interferences based on the absurd notion that goons know more about allocating the fruits of citizens labor than do citizens also contributed.

November 27 2012 at 10:10 PM Report abuse rate up rate down Reply
lightendog

My home value sure didn't go up. So it's true, the grass is always green somewhere you don't live.

November 27 2012 at 4:00 PM Report abuse +2 rate up rate down Reply
maha432

The home prices in our neighborhood, in Prince George's County, outsied DC, are still falling. Our home is now worth $200,000 less than before the mortgage mess and recession. That was money we had planned to use for moving once retired. Now, we will have to stay put or hope it improves a lot.

November 27 2012 at 2:22 PM Report abuse rate up rate down Reply