Home prices rise for sixth month, a sign of recovery
By Leah Schnurr
NEW YORK (Reuters) - U.S. home prices rose for a sixth straight month in July in the latest sign of a sustainable housing market recovery, while a jump in consumer confidence this month offered a harbinger that Americans are ready to loosen their spending.
Six years after its collapse, economists believe the housing market has turned a corner.
Two separate reports on Tuesday showed that home prices rose in July, though the gains were not as strong as the previous month. That follows recent data that home resales and groundbreaking on new properties rose in August, while business sentiment among homebuilders hit a more than six-year high this month.
The S&P/Case Shiller composite index of 20 metropolitan areas rose 0.4 percent in July on a seasonally adjusted basis. Economists had expected a gain of 0.9 percent, which would have matched June's advance. Case Shiller is one of the most closely watched barometers of the U.S. housing market.
On a non-adjusted basis, prices were up 1.6 percent.
The gain in house prices supports the view that "even with the broader economic recovery struggling to gain traction, the housing recovery is sustainable," wrote Paul Diggle, property economist at Capital Economics.
Housing has regained its footing at the same time as the broader economic recovery has lost traction. The economy grew at a 1.7 percent annual rate in the second quarter, and economists say it is not likely to fare much better in the current quarter.
Larry Kantor, head of research at Barclays Capital, said housing has the potential to give a stronger boost to the U.S. economy in 2013 as steadily rising prices reassure Americans that the housing crash is past. Continued...