Home prices in 20 US cities climb

The Pak Banker - - 6BUSINESS -

Res­i­den­tial real es­tate prices in­creased in Jan­uary by the most since June 2006, in­di­cat­ing the U.S. hous­ing mar­ket strength­ened at the start of the year.

The S&P/Case-Shiller in­dex of prop­erty val­ues in 20 cities climbed 8.1 per­cent in Jan­uary from the same month in 2012 af­ter ris­ing 6.8 per­cent in the year ended in De­cem­ber, the group said to­day in New York. The in­crease ex­ceeded the 7.9 per­cent me­dian forecast by econ­o­mists in a Bloomberg sur­vey. Im­prov­ing home val­ues will lure more buy­ers into the real es­tate mar­ket by in­duc­ing cur­rent own­ers to put their prop­er­ties up for sale and prompt­ing builders to be­gin work on new dwellings. His­tor­i­cally low lend­ing rates and a stronger la­bor mar­ket have helped fu­eled the re­bound in hous­ing, which is a source of strength for the econ­omy.

“The hous­ing mar­ket keeps on re­cov­er­ing,” said Christophe Bar­raud, an econ­o­mist at Mar­ket Se­cu­ri­ties-Kyte Group in Paris. He cor­rectly pro­jected the Jan­uary gain and is the third-best fore­caster of home prices in the past two years, ac­cord­ing to data com­piled by Bloomberg. “In­ter­est rates are stay­ing low, which means more first-time home­buy­ers.”

Es­ti­mates for the yearover-year price change ranged from in­creases of 6 per­cent to 8.9 per­cent, ac­cord­ing to fore­casts from the 30 econ­o­mists sur­veyed. The Case-Shiller in­dex is based on a three­month av­er­age, which means the Jan­uary fig­ure was in­flu­enced by trans­ac­tions in De­cem­ber and Novem­ber.

Stock-in­dex fu­tures held gains af­ter the report, with the con­tract on the Stan­dard & Poor’s 500 In­dex ex­pir­ing in June ris­ing 0.2 per­cent to 1,549.6 at 9:09 a.m. in New York. Fig­ures from the Com­merce De­part­ment showed or­ders for durable goods climbed more than forecast in Fe­bru­ary, pro­pelled by au­to­mo­biles and a re­bound in de­mand for com­mer­cial air­craft. The 5.7 per­cent gain was the big­gest since Septem­ber and fol­lowed a 3.8 per­cent drop in the prior month. Home prices ad­justed for sea­sonal vari­a­tions rose 1 per­cent in Jan­uary from the prior month af­ter a 0.9 per­cent gain in De­cem­ber. Phoenix and San Fran­cisco showed the big­gest ad­justed monthly in­creases.

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