Home prices in 20 US cities rise by most in 7 years

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Home prices in 20 US cities rise by most in 7 years Denver Post

 

WASHINGTON — Home prices in 20 U.S. cities rose in the 12 months through July by the most in more than seven years, helping boost owner equity.

The S&P/Case-Shiller index of property values in 20 cities increased 12.4 percent from July 2012, matching the median projection of 31 economists surveyed by Bloomberg and the biggest year-to-year advance since February 2006, a report from the group showed Tuesday in New York.

Gains in home and stock values are contributing to increases in household wealth that are helping bolster consumer spending, the biggest part of the economy. Nonetheless, the appreciation in property values may cool over the rest of the year as mortgage rates close to a two-year high temper demand.

"Prices may come under a little downward pressure as demand slows," Lindsey Piegza, chief economist at Sterne, Agee & Leach Inc, said before the report. "There was a rush of activity as homebuyers anticipated mortgage costs may rise further," she said, and the recent jump in borrowing costs means "housing activity will slow from here."

Another home-price gauge also showed improvement. Values climbed 1 percent in July from the prior month after a 0.7 percent increase in June, according to figures from the Federal Housing Finance Agency.

Estimates in the Bloomberg survey ranged from gains of 10 percent to 13 percent. The S&P/Case-Shiller index is based on a three-month average, which means the July figure was also influenced by transactions in June and May.