House prices soar

For the first time in seven years, the United States is experiencing huge gains in real estate prices. That's great news for the economy.
AP Wire
Apr 3, 2013

U.S. home prices jumped in February by the largest amount in seven years, evidence that the housing recovery strengthened ahead of the all-important spring-buying season.

Home prices rose 10.2 percent in February compared with a year earlier, CoreLogic, a real estate data provider, said Wednesday. The annual gain was the biggest since March 2006. Prices have now increased on an annual basis for 12 straight months, underscoring the recovery's steady momentum.

The gains were broad-based. Prices rose in 47 of 50 states and in all but four of the nation's 100 largest metro areas. Delaware, Alabama and Illinois were the only states to report price declines.

CoreLogic's measure of national prices also rose 0.5 percent in February from January. That's a solid increase during the winter months, when sales typically slow.

An increase in home sales has helped lift prices. In February, sales of previously owned homes reached the highest level in more than three years. Still, much of the demand has come from investors. Sales to first-time buyers remain below healthy levels.

Another reason prices are rising is the supply of available homes for sale remains extremely low. In January, it reached a 13-year low.

The supply of homes for sale did rise in February for the first time in 10 months. That suggests more people are gaining confidence in the housing recovery, which could help ease supply concerns and drive sales higher in the coming months.

The price gains were concentrated in the West, according to CoreLogic. The states with the biggest price gains were Nevada, where prices rose 19.3 percent, followed by Arizona, with 18.6 percent, and California, with 15.3 percent.

Hawaii and Idaho rose 14.6 percent and 13.5 percent, respectively.

The cities with the biggest gains were Phoenix, Los Angeles, Riverside, Calif., Atlanta and New York.

Nationwide, home values were still down more than 26 percent from their peak in April 2006 through February, CoreLogic said.

Steady increases in prices help fuel the housing recovery. They encourage some homeowners to sell homes and entice some would-be buyers to purchase homes before prices rise further.

Higher prices can also make homeowners feel wealthier. That can encourage more consumer spending, which drives 70 percent of economic activity.

Comments

Vladtheimp

And as night follows day: Obama administration pushes banks to make home loans to people with weaker credit http://www.washingtonpost.com/bu...

We are in the very best of hands!

Lanivan

I so agree, Vlad. It's a travesty that the Obama administration, in an attempt to give those folks who lost their jobs, homes, cars, and health care during the Bush Recession of '08-'09 a break on mortgage loans, does not fully anticipate the inevitable greed of the financial institutions and the subsequent mess this greed can create.

An improving housing market with an increase in housing values is but another consequence we must suffer, having reelected Obama to another term of economic improvement. It's just too painful to think of how glorious it could have been to be in the hands of Romney/Ryan! Now *they* would have fully anticipated the greed!

Vladtheimp

Community Reinvestment Act, Bill Clinton, Janet Reno, Andrew Cuomo, Bawney Fwank, Nostrilla Waxman, Franklin Raines, Jaime Gorelick, Fannie Mae, Freddie Mac - and to socialists old and young, The Beat Goes On, The beat goes on,
Drums keep pounding a rhythm to the brain
La de da de de, la de da de da

Lanivan

...Alan Greenspan, Lewis Ranieri, Richard Fuld, Ken Lewis, Greg Pason, Francis Bellamy,....drums keep pounding.....

Lanivan

You're probably wondering how I could leave out....The Financial Services Modernization Act of 1999, Phil Gramm, Jim Leach, Tom Bliley,...bums still cry, "hey buddy, have you got a dime"....

rainbowjoe

It looks like our president might one day have an economic calamity he can call his own, and maybe then we'll stop hearing about the horrors of the Bush/Chaney years. It seems he and his handlers are clueless.

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