Home Prices in U.S. Increase More than Forecast
Optimism, low interest rates, high demand, low supply of homes for sale, all aid in housing recovery.
The housing market is contributing to the economy for the first time in seven years, with home prices climbing more than forecast in October. The S&P/Case-Shiller index of property values in 20 cities was up 4.3 percent since October 2011—the biggest 12-month increase since May 2010. Thirty economists in a Bloomberg survey had projected a median forecast of 4 percent. Record-low interest rates, attractive home prices, and greater optimism are all aiding in helping to drive the housing recovery.
Las Vegas showed the biggest gains in home prices while property values in Chicago dropped the most. Eighteen of the 20 cities in the index showed a year-over-year increase, with strong performance in the southwest and California. However, the job market and the looming fiscal cliff remain factors in driving down economic progress. (Bloomberg)