Home prices rose in the 12 months through March by the most in seven years as the recovery in residential real estate gained momentum.
The S&P/Case-Shiller index of property values increased 10.9% from March 2012, the biggest 12-month gain since April 2006, after advancing 9.4% in February, a report showed today in New York. The median projection of 30 economists surveyed by Bloomberg called for a 10.2% advance.
Property values may keep climbing as cheaper borrowing costs and gains in confidence lure buyers while the number of houses on the market remains near the lowest level in a decade. Rising prices are shoring up household finances, which could give a lift to sales at retailers including Williams-Sonoma Inc., and help builders such as PulteGroup Inc.
“We have a continued gradual recovery,” said Brian Jones, a senior U.S. economist for Societe Generale in New York, who projected a 10.6% increase, the highest forecast in the Bloomberg survey. “The data is solid.”
Stock-index futures held earlier gains after the report. The contract on the Standard & Poor’s 500 Index maturing in June rose 0.9% to 1,665.1 at 9:15 a.m. in New York.
Bloomberg survey estimates ranged from increases of 9.3% to 10.6%. The S&P/Case-Shiller index is based on a three-month average, which means the March data were influenced by transactions in January and February.
February’s reading was revised from a previously reported 9.3% gain.
Today’s report also included quarterly figures for the market nationally. Prices covering all of the U.S. climbed 10.2% in the first quarter from the same period in 2012, compared with a 7.3% gain in the quarter ended December.
Home prices adjusted for seasonal variations increased 1.1% in March, compared with a 1.3 gain in February. The Bloomberg survey median called for a 1% rise.
Los Angeles, Seattle, Charlotte, North Carolina, Portland, Oregon, and Tampa, Florida, showed their biggest month-to-month gains in more than seven years.
The year-over-year gauge, which includes records going back to 2001, provides a better indication of price trends, the group has said.
All 20 cities in the index showed an increase in year-over- year prices, led by gains of 22.5% in Phoenix and 22.2% in San Francisco. The smallest gain was in New York, which showed a 2.6% advance.