U.S. housing prices are showing more signs of recovery. On Tuesday Case-Shiller released their index of home prices in 20 cities and it rose 0.6 percent in February from last year. The National Association of Realtors reported last week that existing-home prices advanced 0.4 percent in March as sales climbed for the first time in four months.
An abundance of inexpensive homes and a stabilizing job market are helping support housing demand, according to Dean Maki, chief U.S. economist for Barclays Capital:
Affordable home prices and the improving economy are doing more to lift sales than the tax credit. Consumers are becoming more confident about a major purchase such as a house. We’ll see a surge as buyers rush to close before the deadline, followed by a subsequent falloff. After that dip, we expect home sales to increase for the rest of the year.
“We’ve turned a corner with housing,” said economist Karl Case, who with Robert Shiller created the index. “As long as mortgage rates don’t jump and employment continues to improve, we should see housing play a key role in preventing a double-dip recession.”
The Case-Shiller Home Price Index is based on repeat transactions and measures the appreciation or depreciation for same the houses as they are resold over time. Many agree that this index is probably one of the best measures of changes in home prices.
The performance of home prices obviously continues to vary widely around the country. During February, the 12-month gain in prices was strongest in the West while prices in Washington D.C. and Dallas rose moderately.
The data continues to point to an extended price recovery, a trend that the index first highlighted back in February.