Residential real estate prices went up in February the most since May 2006. This is an indicator that the housing market in the United States is improving. The S&P/Case-Shiller Index of property values in 20 cities increased 9.3 percent from February 2012, which was more than forecast. The reading went up 8.1 percent in the year ended in January. The increase was above the forecast made in a Bloomberg survey of 9 percent.
If the price gains continue, it could help alleviate the low supply of housing inventory by encouraging more homeowners to put their properties on the market. Mortgage rates are still near all-time lows and the labor market is still improving. These factors boost the residential real estate that has been the source of strength for the expansion.
Estimates for the year-over-year price change ranged from increases of 8.5 percent to 9.3 percent. This was according to the 27 economists polled. The Case-Shiller index is based on a three month average that means the February reading depended on transactions made in December and January.
Home prices that were adjusted for seasonal variations increased 1.2 percent in February from the previous month after it went up 1 percent in January. Las Vegas had the largest adjusted monthly increase with 2 percent. San Francisco, Los Angeles, and Phoenix home prices went up 1.8 percent. Unadjusted prices increased 0.3 percent in March from February as 11 of 20 cities indicated gains.
Year-over-year reading gives better indications of trends in prices according to the S&P/Case-Shiller. The group includes Robert Shiller and Karl Case, economists who made the index.
For the second month in a row, all 20 cities in the index showed year-over-year increase. Phoenix got the largest year-over-year advance with prices increasing 23 percent in 12 months to February. San Francisco got 18.9 percent while Las Vegas went up 17.6 percent.
