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Home Prices in 20 U.S. Cities Climb by Most Since May 2006

*from , April 30, 2013 (To view original article click here.)

Take Away #1: Residential real-estate prices increased in February by the most since May 2006, showing the U.S. Housing market is strengthening.

Key Facts and Figures:

  • The S&P/Case-Shiller index of property values in 20 cities rose 9.3 percent from February 2012.
  • That was more than forecast, after advancing 8.1 percent in the year ended in January.
  • The increase exceeded the 9% median forecast in a Bloomberg survey.
  • Compared with the prior month, prices rose the most since October 2005.
  • Further price gains may help alleviate a lack of housing inventory by encouraging more homeowners to put their properties on the market.
  • Mortgage rates close to all-time lows and an improving labor market are providing a boost for residential real estate, which is a source of strength for the expansion.

Take Away #2: “The recent run up in prices probably has a lot to do with the lack of supply,” said Mark Vitner, a senior economist at Wells Fargo Securities LLC.

Key Facts and Figures:

  • “The more attention that home price gains get, more and more people will realize it’s a good time to sell their home.”
  • Estimates for the year-over-year price change ranged from increases of 8.5% to 9.3%, according to the 27 economists surveyed.
  • The Case-Shiller index is based on a three- month average, which means the February figure was influenced by transactions in January and December.

Take Away #3: Home prices adjusted for seasonal variations rose 1.2% in February from the prior month after climbing 1% in January.

Key Facts and Figures:

  • Las Vegas showed the biggest adjusted monthly increase, with prices climbing 2%.
  • San Francisco, Phoenix, and Los Angeles home prices advanced 1.8%.
  • Unadjusted prices climbed 0.3% last month from February.

Take Away #4: For a second straight month, all 20 cities in the index showed a year-over-year increase.

Key Facts and Figures:

  • The year-over-year gauge provides better indications of trends in prices, according to the S&P/Case-Shiller Group.
  • Phoenix showed the biggest year-over-year increase, with prices jumping 23% in the 12 months to February.
  • Home values in San Francisco advanced 18.9%, while in Las Vegas, they were up 17.6%.

Take Away #5: “Housing continues to be one of the brighter spots in the economy,” said David Blitzer, chairman of the S&P index committee.

Key Facts and Figures:

  • “Home prices continue to show solid increases,” said Blitzer.
  • Demand that’s rising while inventories remain tight has exerted upward pressure on home values.
  • There were 1.93 million previously-owned properties on the market last month, the fewest of any March since 2000, according to data from the National Association of Realtors.
  • Price figures from the NAR showed the median value of an existing home rose 11.8 percent, the most since November 2005, to $184,300 last month from $164,800 in March 2012.
  • Other indicators corroborate the NAR data.
  • Property values climbed 10.2 percent in the 12 months through February, the most in almost seven years, according to Irvine, California-based CoreLogic Inc.
  • Prices advanced 7.1 percent in the year through February, the most since 2006, the Federal Housing Finance Agency said on April 23.

Take Away #6: “Demand for homes has strengthened and the relative available housing supply has shrunk, which has created a favorable pricing environment,” said CEO Donald Tomnitz of D.R. Horton Inc.

Key Facts and Figures:

  • D.R. Horton is the largest U.S. homebuilder by volume.
  • “Out first-time buyer demand remains very strong, and we continue to see improving demand from move-up buyers,” said Tomnitz.

Take Away #7: More sales could propel prices even higher, inducing others to join the market to take advantage of cheap mortgage-rates before borrowing costs rise.

Key Facts and Figures:

  • The average rate for a 30-year fixed mortgage was 3.4% in the week ended April 25, down from 3.41%, according to Freddie Mac.
  • In November, the rate reached an all-time low of 3.31%.
  • The average 15-year rate dropped to a record-low 2.61%.

Take Away #8: Higher home prices have also boosted household wealth, which will help underpin consumer spending, and in turn, spur economic growth.

Key Facts and Figures:

  • Figures from the Federal Reserve show that the value of American’s real estate worth has climbed each quarter since July 2011.
  • Stock-index futures were little changed after the figures, with the contract on the S&P 500 Index expiring in June falling 0.1%to 1,587.2 at 9:29 a.m. in New York.

*To view original article from www.bloomberg.com click here.

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