Home prices adjusted for seasonal variations increased 0.4 percent in September from the prior month, with 18 of 20 cities showing gains. Atlanta and San Diego showed advances of 1.7 percent. Property values dropped 0.7 percent in Chicago and were unchanged in Tampa, Florida. Unadjusted prices climbed 0.3 percent in September from the prior month.
The year-over-year gauge provides better indications of trends in prices, according to the S&P/Case-Shiller group. The panel includes Karl Case and Robert Shiller, the economists who created the index.
Eighteen of the 20 cities in the index showed a year-over- year gain, led by a 20.4 percent surge in Phoenix. New York and Chicago posted the two decreases in values from a year earlier. Year-over-year records began in 2001.
“With six months of consistently rising home prices, it is safe to say that we are now in the midst of a recovery in the housing market,” David Blitzer, chairman of the index committee, said in a statement.
Record-low borrowing costs have fueled demand for those able to get financing. The average rate on a 30-year, fixed mortgage declined to 3.31 percent last week, the lowest in data going back to 1972, according to McLean, Virginia-based Freddie Mac.
The Fed is moving forward with record monetary easing that includes plans to buy $40 billion a month of mortgage-backed securities, intending to spur growth and reduce a 7.9 percent unemployment rate.
Fed Chairman Ben S. Bernanke said the Fed will take action to speed growth and a rebound in a housing market facing obstacles such as too-tight lending rules.
“We will continue to use the policy tools that we have to help support economic recovery,” Bernanke said in a Nov. 15 speech in Atlanta.
Bernanke said while tighter credit standards after a collapse in the subprime mortgage market were appropriate, “it seems likely at this point that the pendulum has swung too far the other way, and that overly tight lending standards may now be preventing creditworthy borrowers from buying homes, thereby slowing the revival in housing and impeding the economic recovery.”
Americans bought previously owned homes at the second- fastest pace in more than two years, figures from the National Association of Realtors showed Nov. 19 in Washington.
Horsham, Pennsylvania-based Toll Brothers Inc., a luxury- home builder, is among businesses seeing higher demand amid improved pricing.
“We’re in a strong phase of the recovery” owing to “five years of pent-up demand,” affordability and rising prices, Chief Financial Officer Martin Connor said at a Nov. 15 conference. “I think we’ve seen U.S. consumer confidence remain relatively stable and improving, despite a number of speed bumps along the course of this year.”
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