NEW YORK. Home prices in 20 U.S. cities rose less than forecast in February from a year earlier, a sign a housing recovery will take time to develop.
“The big plunge is over, but significant strength is unlikely,” said Jim O’Sullivan, chief economist at MF Global Ltd. in New York. A pickup in employment is needed to help stem the damage from mounting foreclosures that are restraining further gains in property values.
Prices may improve in coming months as homebuyers rush to take advantage of a government tax credit worth as much as $8,000. Purchase contracts must be signed by the end of this week and transactions need to close by the end of June for buyers to be eligible.