Christopher S. Rugaber
WASHINGTON: Home prices rose in March from February in most major U.S. cities for the first time in seven months. The increase is the latest evidence of a slow recovery taking shape in the troubled housing market.
The Standard & Poor’s/Case-Shiller home price index shows that prices increased in 12 of the 20 cities it tracks.
Three of the weakest markets reported signs of improvement. Prices increased in Tampa and Miami, while prices in Las Vegas were unchanged.
The biggest month-over-month increases were in Phoenix, Seattle and Dallas. Prices dropped the most in Detroit, Chicago and Atlanta.
Home prices in the greater Cleveland area rose slightly from February to March but still remained, on average, below levels seen 12 years ago.
The Cleveland metro index rose 0.4 points from February to 94.65 in March. The index was given an initial value of 100 in January 2000. Prices were down 2.4 percent from a year ago.
Cleveland was one of four city areas where housing prices were below their January 2000 levels, according to the index. The other three are Atlanta, Detroit and Las Vegas. Chicago area prices were just barely above their January 2000 levels.
Rising home prices in most cities adds to other encouraging signs for a housing rebound. Home sales are up, mortgage rates are at historic lows and builders are more confident.
Even though 12 cities showed gains, the weaker cities weighed on national home prices. The 20-city index edged down to its lowest level since the housing bubble burst.
Still, home price declines have slowed and a majority of markets are on the rise.
“This is relatively good news,” said David Blitzer, chairman of the index committee at S&P. “We just need to see it happen in more of the cities and for many months in a row.”
The increases partly reflect the beginning of the spring selling season. The month-to-month prices aren’t adjusted for seasonal factors.
The S&P/Case-Shiller monthly index covers half of all U.S. homes. It measures prices compared with those in January 2000 and creates a three-month moving average. The March figures are the latest available.
Price drops are slowing over the past 12 months. The 20-city index dropped 2.6 percent in March, compared with the same month last year. That’s better than the 3.5 percent year-over-year drop from February and is the smallest annual drop since December 2010.
Other measures of home prices have also shown gains. But the S&P/Case-Shiller index uses a three-month moving average, which means it could take longer to signal greater improvement.
“It might be the last of the closely followed home price figures to reflect a turning point,” said Jonathan Basile, an economist at Credit Suisse.
A better job market has also made more people open to buying a home. Employers have added 1 million jobs in the past five months, though the gains slowed in April and March. Unemployment has dropped a full percentage point since August, from 9.1 percent to 8.1 percent in April.
Economists predict 160,000 jobs were added this month, while the unemployment rate was unchanged. The government will report on May job growth Friday.