Wednesday, April 28, 2010

Home Prices in Feb Showed First Annual Gain in 3 Years

In the last few days there have been a handful of announcements with good new for our economy. In addition job growth, home prices in the U.S. showed a rise in the month of February, which is the first time we have seen an increase in three years. As this ABC News story explains, although this is a good sign, many economists have been quick to warn Americans not to assume the housing market is rebounding already.

Despite the 0.6 percent increase on a non-seasonally adjusted basis, 11 of the 20 cities in the Standard & Poor's/Case-Shiller home price index showed declines.

The last time prices rose on a year-over-year basis was December 2006. But economists polled by Thomson Reuters had predicted prices to rise 1.2 percent in February.

Home prices are up more than 3 percent from the bottom in May 2009, but still are 30 percent below the May 2006 peak.

Las Vegas saw the largest annual drop at almost 15 percent. San Francisco posted the biggest gain, at about 12 percent.

"These data point to a risk that home prices could decline further before experiencing any sustained gains," David Blitzer, chairman of the S&P index committee, said in a statement.

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