U.S. home prices up, but NY state takes a hit
U.S. home prices rose in most major cities in October compared with a year ago, pushed up by rising sales and a decline in the supply of available homes.
Higher prices show the national housing market is improving even as it moves into the more dormant fall and winter sales period.
The Standard & Poor's/Case-Shiller national home price index released Wednesday increased 4.3 percent in October compared with a year ago. That's the largest year-over-year increase in two and a half years, when a home buyer tax credit temporarily boosted sales.
Prices rose in October from a year ago in 18 of 20 cities. Phoenix led all cities with a 21.7 percent gain, followed by Detroit, where prices increased 10 percent.
Prices declined in Chicago and New York.
Home prices fell in 12 of 20 cities in October compared with September. Monthly prices are not seasonally adjusted, so the decreases reflect the end of the peak buying season.
Still, the broader trend is encouraging. October marked the fifth straight month of year-over-year gains, after nearly two years of declines. Prices rose in mid-2010 in the final months before the tax credit expired. They had fallen sharply in 2008 and 2009.
"It is clear that the housing recovery is gaining strength," said David Blitzer, chairman of the index committee at S&P Dow Jones Indexes.
The improvement in housing is adding to economic growth and most analysts expect that to continue in 2013.
But automatic tax increases and spending cuts that are set to take effect next week could drag down growth. The White House and Congress have so far failed to reach agreement on a way to avoid the "fiscal cliff."
Prices nationwide have recovered to about the same level as in the fall of 2003, according to the Case-Shiller index. They remain about 30 percent below the peak reached in the summer of 2006. 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.