Tuesday, 29 May 2012 18:22
NEW YORK: US single-family home prices edged higher in March, the second month in row of gains, adding to signs the housing market is stabilizing, a closely watched survey said on Tuesday.
The S&P/Case Shiller composite index of 20 metropolitan areas gained 0.1 percent in March on a seasonally adjusted basis, falling shy of economists' forecasts for a gain of 0.2 percent.
On an unadjusted basis, the index was unchanged.
Prices in the 20 cities fell 2.6 percent from a year ago, an improvement from the 3.5 percent yearly decline seen last month.
US stock index futures remained higher immediately following the data, while Treasuries prices held on to gains.
Still, it was too early to say housing prices have turned, despite the improvement in some regions, David Blitzer, chairman of the index committee at S&P Indexes, said in a statement.
The major house price indexes ended the first quarter at new post-financial crisis lows, the report said. For the first quarter, prices were down 2 percent, compared to a 3.9 percent decline in the last three months of 2011.
The housing market has been a thorn in the side of the broader economic recovery, but the sector has been gaining traction with new construction and sales rising in April.
"In my mind there is no question that housing has bottomed, in terms of home sales, home construction and home prices, but the recovery is still going to be very modest or very sluggish," said Mark Vitner, senior economist at Wells Fargo Securities in Charlotte, North Carolina.
Compared to a year ago, seven of the 20 cities saw price increases, including Detroit and Phoenix.
"This is what we need for a sustained recovery; monthly increases coupled with improving annual rates of change," said Blitzer.
"Once we see this on a broader level we will be able to say the market has turned around."
Copyright Reuters, 2012