US home prices see best yearly gain since 2006



Reuters

Published — Tuesday 29 January 2013

Last update 30 January 2013 12:18 am

| نسخة PDF Print News | A A

NEW YORK: US home prices rose in November to rack up their best yearly gain since the housing crisis began, a further sign that the sector is on the mend.
But data on consumer confidence yesterday was less encouraging, with moods falling to their lowest level in more than a year as Americans became more pessimistic about the economic outlook and their financial prospects in the wake of higher taxes for many.
The S&P/Case Shiller composite index of 20 metropolitan areas gained 0.6 percent in November on a seasonally adjusted basis, in line with economists' forecasts.
Prices in the 20 cities rose 5.5 percent year over year, making for the strongest yearly price increase since August 2006 when prices were on their way down.
The housing market became a bright spot for the economy last year as prices rose and inventory tightened. The sector is expected to contribute to economic growth in 2013.
"What we're seeing is really a gradual improvement in the overall economy," said Anthony Chan, chief economist for Chase Private Client in New York.
Rising home prices and recent gains in the stock market should blunt the impact of tax increases for consumers and spending should improve by the second half of the year, said Chan.
Homebuyers also have been enticed by historically low interest rates. The Federal Reserve's latest stimulus efforts are helping to keep rates low, as the central bank buys assets including mortgage-backed securities.
It was the 10th month in a row that prices have increased, the longest string of gains since before 2006. Last year's rise in prices beat a nine-month consecutive run in 2009 and 2010, when the market was boosted by a homebuyer tax credit.
A number of challenges remain for the housing market, including tight access to mortgages and on-going foreclosures.
Highlighting the hurdles on the path to recovery, separate government data showed the homeownership rate slipped to 65.4 percent in the fourth quarter from 65.5 percent.
Consumer attitudes dropped more than expected to 58.6 in January, data from The Conference Board showed. It was the lowest level since November 2011.
At the start of the year, US politicians came to an agreement that averted the so-called fiscal cliff of spending cuts and tax increases that had been set to come into effect.
But the deal did raise taxes for many Americans, while a payroll tax holiday came to an end. Lawmakers still face a number of budget decisions.
"Consumers are probably pretty unhappy to notice that their payroll taxes have gone up," said David Sloan, economist at 4Cast Ltd. in New York.
US stocks pared slight gains immediately after the report was released, but Wall Street was modestly higher by midday.
The Conference Board's consumer expectations index tumbled to its lowest level since October 2011 at 59.5, while the present situation measure slipped to 57.3.
Consumers' views on the labor market were also weaker, with the "jobs hard to get" index rising for the first time since September.
Economists said the pain should be short lived and that confidence was likely to perk back up as long as Washington can come to an agreement on the budget issues yet to be resolved.
"This might bounce back pretty quickly as people get used to a smaller paycheck. Right now, it's a sticker shock," said Craig Dismuke, chief economic strategist at Vining Sparks in Memphis, Tennessee.
Home prices on a non-adjusted basis slipped 0.1 percent. The non-adjusted numbers showed prices fell in about half of the cities covered by the survey, with the winter months typically a weak period for housing, the survey said.
Phoenix, which saw its housing market rebound sharply last year, led with the biggest yearly gain at 22.8 percent. New York was the only city to fall, down 1.2 percent from the previous year.

What's happening around Saudi Arabia

RIYADH: Three citizens, aged above 65, and a 32-year-old expatriate have died of Middle East Respiratory Syndrome (MERS) in Riyadh raising the death toll to 471 in Saudi Arabia since June 2012, the Ministry of Health said on Tuesday.It also reported...
JEDDAH: Five hospitals and health centers across the Kingdom have been ranked among the 10 top hospitals in the Arab World, according to the Webometrics Ranking of World Hospitals 2015 conducted by Cybermetrics Lab. King Faisal Specialist Hospital an...
RIYADH: The children of the martyrs and wounded soldiers will be given preference for jobs in the organization, KACST President Prince Turki bin Saud Bin Mohammad Al-Saud said Riyadh on Tuesday.On an initiative from the Ministry of Education, a two-d...
JEDDAH: The laboratory of Al-Amal Complex for Mental Health was recently ranked fifth in the RIQAS program for biochemistry out of 120 laboratories. It also came in sixth in the same program for the department of hematology among the 60 participants,...
RIYADH: Anticipating high temperatures during the Haj season, the Ministry of Health has made arrangements to install more equipment to treat heatstroke patients among pilgrims, Health Ministry spokesman Khaled Al-Mirghalani said following a meeting...
RIYADH: The National Water Company (NWC) has added a new feather to its cap by launching an e-branch (website www.nwc.com.sa) to serve the customers around the clock.The NWC, which aims to become the leading water utility in the Gulf that comes under...
DAMMAM: Traffic regulations in the Kingdom and many countries of the world dedicate the right lane of highways and roads to trucks as they are designed to carry heavy weights in contrast to the other lanes, which are allocated for lighter weight vehi...
RIYADH: The solar-power plant, “Layla,” in Aflaj province, will be opened shortly, Saleh Al-Awaji, chairman of Saudi Electricity Company (SEC), has said.The Saudi Electricity Company (SEC) is one of the signatories, along with King Abdulaziz City for...
RIYADH: The expanded facility for machine readable passports (MRPs) at the Embassy of Pakistan will help the mission process over 1,200 applications on daily basis. The new setup was inaugurated on Tuesday.Saudi Arabia hosts the largest Pakistan comm...
RIYADH: The Saudi Standards, Metrology and Quality Organization (SASO) has directed manufacturers and their agents in the Kingdom to strictly follow the safety regulations for the new cars to be marketed to the Kingdom beginning 2017.In a statement r...
RIYADH: The Ministry of Social Affairs recently honored 20 academically gifted orphans whom it had earlier sent to Japan for ten days to visit attractions that include cultural and educational institutions. Ministry of Social Affairs Undersecretary D...
JEDDAH: Prince Bandar bin Abdullah, member of the board of trustees of King Abdullah bin Abdul Aziz International Foundation for Humanitarian Action, spoke at the World Scout Jamboree in Japan. He expressed his gratitude and appreciation for the invi...
JEDDAH: The Ministry of Health has issued a circular to all health sector employees to ensure they sterilize their hands prior to dealing with patients.The circular, issued by Deputy Minister for Public Health Dr. Abdul Aziz Abdullah bin Saeed, is in...
JEDDAH: The Indonesian Consulate and community have been conducting their 70th Independence Day celebrations for the past three months by having different cultural and social activities. On Tuesday, the consulate arranged a blood donation camp with t...
JEDDAH: The Specialized Penal Court in Jeddah on Tuesday issued a preliminary verdict on the imprisonment of two Saudi suspects to 38 years.The first suspect was charged with firing on the police center in Awamiyah, Qatif Province, while the other wa...

Stay Connected

Facebook