Home prices in 20 U.S. cities rose in December for a seventh consecutive month, indicating the industry at the heart of the worst recession since the 1930s is stabilizing.
The S&P/Case-Shiller home-price index increased 0.3 percent from the prior month on a seasonally adjusted basis, more than anticipated and matching the gain in November, figures from the group showed today in New York. The gauge was down 3.1 percent from December 2008, the smallest decline since May 2007.
Lower property values, rising incomes and government credits are making homes more affordable. A sustained recovery in housing still faces hurdles that include mounting foreclosures, a weak labor market and the eventual end of a Federal Reserve program aimed at keeping borrowing costs low.
"It's reassuring that we're seeing stabilization and outright increases in home prices," said Michael Feroli, an economist at JPMorgan Chase & Co., who accurately forecast the adjusted month-over-month gain. He said he expects prices to be "flat" in coming months.
Confidence Slumps
Stocks fell and Treasury securities rose after a separate report showed consumer confidence dropped in February to a 10- month low. The New York-based Conference Board said its index of sentiment slumped to 46, below the lowest forecast in a Bloomberg survey, from 56.5 in January.
The Standard & Poor's 500 Index fell 1.2 percent to 1,094.49 at 12:53 p.m. in New York. The yield on the 10-year Treasury note declined seven basis points to 3.72 percent.
Source: Business Week
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