September 25, 2012 - 12:08 pm
WASHINGTON – Home prices in a widely watched survey climbed more than forecast in July from a year earlier with Las Vegas showing short-term gains but a year-over-year loss.
The S&P/Case-Shiller index of property values in 20 cities increased 1.2 percent from July 2011, the biggest 12-month advance since August 2010, a report from the group showed Tuesday in New York. The median forecast of 23 economists surveyed by Bloomberg News called for a 1.1 percent gain.
Sixteen of the 20 cities in the index showed a year-over-year gain, led by a 17 percent increase in Phoenix.
However, Las Vegas was one of four cities where prices decreased from a year ago. Atlanta had the largest decrease of 9.9 percent, followed by New York (-2.6 percent), Las Vegas (-1.0 percent) and Chicago (-0.9 percent).
However, Las Vegas posted a 0.7 percent increase from June, following a 1.5 percent increase from May.
Home Builders Research on Tuesday reported that Las Vegas resale prices rose for the sixth straight month in August. The median price of an existing home was $125,650, a 17.4 percent increase from a year ago.
Housing analyst Dennis Smith doubts the upward trend can continue.
“(Now) it appears the increases might continue for another few months, and then the prices could – at best – sustain that level for a while,” he said. “We hope they can hold at least through 2013.”
Nationally, the lowest mortgage rates on record are attracting buyers, helping absorb the supply of distressed properties that had depressed values. The average rate on a 30-year fixed mortgage fell to 3.49 percent in the week ended Sept. 20, matching a record low in data going back to 1972, figures from Freddie Mac show.
“We’re finally seeing a more sustained and broad-based improvement in home prices,” said Millan Mulraine, senior U.S. strategist for TD Securities in New York, who correctly projected the year-over-year increase. “The housing sector has made an important turn here, and that is being sustained.”
Estimates in the Bloomberg News survey ranged from gains of 0.3 percent to 2.51 percent. The Case-Shiller index is based on a three-month average, which means the July data were influenced by transactions in May and June.
The 20-city index accelerated after showing a 0.6 percent advance in the year ended June. Year-over-year records began in 2001.
Home prices adjusted for seasonal variations increased 0.4 percent in July from the prior month. Unadjusted prices climbed 1.6 percent from the previous month as all 20 cities showed gains for a third consecutive month.
“All in all, we are more optimistic about housing,” David Blitzer, chairman of the S&P index committee, said in a statement. “Stronger housing numbers are a positive factor for other measures including consumer confidence.”
The year-over-year gauge provides better indications of trends in prices, the group has said. The panel includes Karl Case and Robert Shiller, the economists who created the index.
“The housing market recovery is accelerating as inventory continues to decline and prices are now rising,” Jeffrey Mezger, the company’s president and chief executive officer, said on a Friday earnings call.
Recent reports also show a surge in demand. New-home construction climbed last month, boosted by the strongest pace of single-family starts in more than two years, the Commerce Department reported last week. Purchases of existing homes rose more than forecast in August to a two-year high, figures from the National Association of Realtors showed.
The Commerce Department is scheduled to release data on sales of new homes at 10 a.m. today in Washington.
Las Vegas Review-Journal writer Hubble Smith contributed to this report.