Home prices accelerate by most in seven years

A single family home is shown for sale in Encinitas, California May 22, 2013. REUTERS/Mike Blake
A single family home is shown for sale in Encinitas, California May 22, 2013. REUTERS/Mike Blake

NEW YORK (Reuters) – Home prices accelerated by the most in nearly seven years in March while consumer confidence surged in May, suggesting there were areas of resilience for an economy that is facing the pinch of belt-tightening in Washington.

The S&P/Case Shiller composite index of 20 metropolitan areas climbed 10.9 percent year over year, beating expectations for 10.2 percent, the survey released on Tuesday showed. This was the biggest increase since April 2006, just before prices peaked in the summer of that year.

Prices in the 20 cities gained 1.1 percent in March compared to the month before on a seasonally adjusted basis, topping economists’ forecasts for a 1 percent rise.

All 20 cities covered by the index saw yearly gains for the third month in a row.

The housing market turned a corner in 2012, several years after its far-reaching collapse. The recovery has picked up since as inventory tightened, foreclosures eased and historically low mortgage rates have attracted buyers.

“Low inventories and gradually improving housing demand have combined to push housing starts higher and support home price appreciation,” said Michael Gapen, an economist at Barclays in New York.

“We see these factors as remaining in place and expect residential investment to add to GDP growth in the coming quarters. We also expect rising real estate wealth to support household balance sheets and underpin consumption, helping the broader economy to offset a substantial fiscal drag in 2013.”

Prices in Phoenix continued their sharp ascent, rising 22.5 percent from a year earlier. Other standouts included San Francisco, up 22.2 percent, and hard-hit Las Vegas, up 20.6 percent.

For the first quarter of this year, the seasonally adjusted national index rose 3.9 percent, stronger than the 2.4 percent gain of the final quarter of last year.

Housing and the consumer have shown strength even as there have been hints tighter fiscal policy is starting to bite in the broader economy. Across-the-board government spending cuts of $85 billion went into effect in March, while the payroll tax holiday expired at the beginning of the year, raising taxes for many Americans.

Economists expect the pace of growth likely cooled in the second quarter, partly due to tighter fiscal policy, but the second half of the year is seen regaining momentum.

Separate data on Tuesday showed consumer confidence strengthened in May to the highest level in more than five years.

The Conference Board, an industry group, said its index of consumer attitudes jumped to 76.2 from an upwardly revised 69 in April, topping economists’ expectations for 71. It was the best level since February 2008.

April was originally reported as 68.1. After dropping in March, it was the second month in a row confidence has improved.

The expectations index rose to 82.4 from 74.3, while the present situation index climbed to 66.7 from 61.

Consumers’ assessment of the labor market improved. The “jobs hard to get” index slipped to 36.1 percent from 36.9 percent the month before, while the “jobs plentiful” index gained to 10.8 percent from 9.7 percent.

In a sign of confidence among high-end consumers, jeweler Tiffany & Co reported better-than-expected sales for the first quarter.

(Editing by Chizu Nomiyama)



News
Entertainment
Sports
Lifestyle
National

Dogs are capable of feeling jealousy - U.S.…

By Curtis Skinner(Reuters) - Dogs are a man's best friend, and research released on Wednesday says canines want to keep it that way.Dogs are capable…

Local

G train riders brace for five-week shutdown

G train service will be suspended between Brooklyn and Queens between Friday, July 25, and Tuesday, Sept. 2.

International

Peaches Geldof's death was drugs-related, coroner rules

LONDON (Reuters) - The death of Peaches Geldof, the daughter of musician and Band Aid founder Bob Geldof, was drugs-related, a coroner ruled on Wednesday.The…

Local

Family, supporters gather in Brooklyn for Eric Garner…

Family members gathered on Wednesday for the funeral of Eric Garner, who died shortly after police put him in a banned chokehold as they arrested him.

Going Out

Where to go drinking on National Tequila Day…

Thursday is just close enough to the end of the week to make you envision yourself already sunning on a beach towel or lounging by…

Going Out

Things to do in NYC this week: July…

Performing arts A 70’s Summer Night Friday, 6:30 p.m. The Green Building 452 Union St., Gowanus $35, 347-529-6473 Party like it’s summer in the 1970s…

Going Out

5 must-try dishes at Edible Manhattan's Good Beer

Rooting out the exotic amid the New York City bar scene is noble quest. But if you’d like to have it all come to you,…

Books

Art imitates life (almost) in David Shapiro's new…

David Shapiro talks about his book, "You're Not Much Use To Anyone."

NFL

Jerry Reese confident with Giants, skipping countdown clocks…

Last year, Giants GM Jerry Reese installed a countdown clock in the locker room to inspire Big Blue to play in their own stadium for Super Bowl XLVIII.

MLB

Brandon McCarthy finds his calling on Twitter

Yankees starter Brandon McCarthy joined Twitter three year ago for the same reason many people do: to get news quickly.

Sports

NBA great LeBron James sends 800 cupcake apologies…

By Kim PalmerCLEVELAND (Reuters) - NBA star LeBron James, whose recent return to the Cleveland Cavaliers in his home state of Ohio sparked a frenzy…

NFL

Fantasy football: Johnny Manziel could give your running…

Fantasy football: Johnny Manziel could give your running game a boost

Food

Recharge with a post-workout smoothie from Nicky Hilton

Some people can roll out of bed right as their alarm goes off. And that alarm isn’t set for 20 minutes before they have to…

Education

Colleges are increasingly embracing the concept of gender-neutral…

  Northwestern University recently made headlines after announcing that it would be installing two gender-neutral bathrooms in the university's student center. “These are two gender-open…

Career

How to prepare to interview for your dream…

    Congratulations! You landed a job interview at your dream company! A lot of hard work has gone into determining which companies to apply…

Style

The shirtdress is a summer must-have

  We love throwing on our boyfriend’s shirt and a pair of jeans (no matter how much he grumbles that it’s his turn to wear the…