Monthly Home Prices Rise Again — With An Asterisk
Home prices rose for the fifth month in a row in October, but the recovery continues to be uneven with only 11 of the 20 metro areas tracked showing gains.
The Standard & Poor's/Case-Shiller home price index released Tuesday edged up 0.4 percent to a seasonally adjusted reading of 145.36 in October from September. The index was off 7.3 percent from October last year, nearly matching expectations of economists surveyed by Thomson Reuters.
The index is now up 3.4 percent from its bottom in May, but still almost 30 percent below its peak in April 2006.
San Francisco and Detroit posting the largest increases. Dallas recorded a flat reading for the month, while Tampa and Chicago had the largest declines.
"Coming after a series of solid gains, these data are likely to spark worries that home prices are about to take a second dip," David Blitzer, chairman of the index committee at Standard & Poor's, said in a statement. That happened in the early 1980s, he said, and the current housing recovery appears more solid.
The federal government has stepped in with an extraordinary level of support this year for the housing market. Home price gains since the summer reflect the rush of homebuyers trying to close their deals before the original expiration date of a federal tax credit. The Nov. 30 deadline was extended last month to April 30.
Besides a credit of up to $8,000 for first-time buyers, Congress expanded the program to include homeowners who have lived in their current properties for at least five years. They can now claim a tax credit of up to $6,500 if they relocate.
The Federal Reserve is also buying up $1.25 trillion in mortgage-backed securities to help keep interest rates at historical lows.