Home prices in 20 U.S. cities rose by the most since February 2006 in the 12 months through September, showing the housing market sustained progress even as borrowing costs climbed.
The S&P/Case-Shiller index of property values advanced 13.3% after increasing 12.8% a month earlier, the group said today in New York. The median forecast in a Bloomberg survey of 31 economists called for a 13% advance.
Sellers are standing firm on asking prices as buyers compete for a limited number of available properties. Higher home values are helping propel gains in Americans’ net worth, boosting confidence among homeowners and creating momentum for consumer spending.
“There’s no sign of slowing at this point,” Jim O’Sullivan, chief U.S. economist at High Frequency Economics LLC in Valhalla, New York, said before the report. “With the labor market recovery apparently still on track and confidence starting to move up again, I would expect the home sales to move up.”
Bloomberg survey estimates ranged from increases of 12.4% to 13.5%. The S&P/Case-Shiller index is based on a three-month average, which means the September data were influenced by transactions in July and August.
Other figures showed more applications for home construction were issued in October than at any time in the past five years. Building permits increased 6.2% last month to a 1.03 million annualized rate, the most since June 2008, the Commerce Department said today.
Figures for housing starts, which usually accompany the permits data, are delayed until Dec. 18 because last month’s government shutdown kept the agency from gathering the data in time.
Stock-index futures were little changed after the figures. The contract on the Standard & Poor’s 500 Index expiring in December fell less than 0.1% to 1,802 at 9:14 a.m. in New York.
Today’s S&P/Case-Shiller report also included quarterly figures for the market nationally. Prices covering all of the U.S. climbed 11.2% in the third quarter from the same period in 2012, the biggest increase since the first three months of 2006, compared with a 9.9% gain in the quarter ended in June.