[Home] [Headlines] [Latest Articles] [Latest Comments] [Post] [Mail] [Sign-in] [Setup] [Help] [Register]
|
Status: Not Logged In; Sign In
Business Title: Home Prices in 20 U.S. Cities Rose for Seventh Month Feb. 23 (Bloomberg) -- Home prices in 20 U.S. cities rose in December for a seventh consecutive month, indicating the industry at the heart of the worst recession since the 1930s is stabilizing. The S&P/Case-Shiller home-price index increased 0.3 percent from the prior month on a seasonally adjusted basis, more than anticipated and matching the gain in November, figures from the group showed today in New York. The gauge was down 3.1 percent from December 2008, the smallest decline since May 2007. Lower property values, rising incomes and government credits are making homes more affordable. A sustained recovery in housing still faces hurdles that include mounting foreclosures, a weak labor market and the eventual end of a Federal Reserve program aimed at keeping borrowing costs low. “It’s reassuring that we’re seeing stabilization and outright increases in home prices,” said Michael Feroli, an economist at JPMorgan Chase & Co., who accurately forecast the adjusted month-over-month gain. He said he expects prices to be “flat” in coming months. Economists surveyed by Bloomberg News anticipated prices would drop 3.1 percent in the 12 months to December, based on the median estimate of 27 projections. Estimates ranged from a decline of 5.3 percent to a gain of 3 percent. They also forecast a 0.1 percent seasonally adjusted increase in December from a month earlier, the survey showed. Stock-Index Futures Stock-index futures maintained declines after the report. Futures on the Standard & Poor’s 500 Index expiring in March fell 0.4 percent to 1,103.1 at 9:07 a.m. in New York. The yield on the 10-year Treasury note declined three basis points, or 0.03 percentage point, to 3.77 percent. Compared with the prior month, 14 of the 20 areas covered showed an increase on a seasonally adjusted basis, while five had a decline. The biggest month-to-month gain was in Los Angeles, where prices rose 1.4 percent. Increased foreclosures and an unemployment rate that economists forecast will end the year at 9.5 percent are obstacles to steady gains in housing prices. Rising foreclosures are adding to inventory and may discourage some builders from beginning construction. A record 3 million U.S. homes will be repossessed by lenders this year as unemployment and depressed home values leave borrowers unable to make their house payment or sell, according to a RealtyTrac Inc. forecast last month. Last year there were 2.82 million foreclosures, the most since the Irvine, California-based company began compiling data in 2005. Tax Credit In an effort to bolster the housing market, President Barack Obama in November extended a tax credit for first-time homebuyers and expanded the program through April 30 to include some current owners. The end of Fed purchases of mortgage-backed securities, aimed at keeping borrowing costs low, represents another challenge for the industry. The program is scheduled to expire by March 31. Some homebuilders are seeing gains ahead of the expiration of the homebuyer tax credit. D.R. Horton Inc., the second- largest U.S. homebuilder by revenue, this month reported its first quarterly profit since 2007. “We expect our September quarter will be the most challenging as a tax credit support for home sales will have expired,” Donald J. Tomnitz, president and chief executive officer, said during a Feb. 2 conference call. Sales at Lowe’s Lowe’s Cos., the second-largest U.S. home-improvement retailers, yesterday posted better-than-forecast sales in the fourth quarter, signaling a recovery in the housing market. The Mooresville, North Carolina-based company said sales in stores open at least 13 months may rise as much as 3 percent this year. “We don’t have the job losses at as large a rate as we had previously,” Chairman and Chief Executive Officer Robert Niblock, said yesterday in a telephone interview. “Home prices are still dropping but not at the magnitude that they were.” The economy lost 20,000 jobs in January after 150,000 a month earlier, Labor Department figures showed. The unemployment rate dropped to 9.7 percent last month, the lowest in five months. Karl Case, a former economist professor at Wellesley College, and Robert Shiller, chief economist at MacroMarkets LLC and a professor at Yale University, created the home-price index based on research from the 1980s. -- With assistance from Chris Burritt in Greensboro, North Carolina, and John Gittelsohn in New York. Editor: Vince Golle To contact the reporter on this story: Timothy R. Homan in Washington at thoman1@bloomberg.net Last Updated: February 23, 2010 09:13 EST
Post Comment Private Reply Ignore Thread |
|
[Home] [Headlines] [Latest Articles] [Latest Comments] [Post] [Mail] [Sign-in] [Setup] [Help] [Register]
|