Residential real-estate prices increased in February by the most since May 2006, showing the U.S. housing market is strengthening.
The S&P/Case-Shiller index of property values in 20 cities rose 9.3 percent from February 2012, more than forecast, after advancing 8.1 percent in the year ended in January, the group said today in New York. The increase exceeded the 9 percent median forecast in a Bloomberg survey. Compared with the prior month, prices rose the most since October 2005.
Further price gains may help alleviate a lack of housing inventory by encouraging more homeowners to put their properties on the market. At the same time, mortgage rates close to all- time lows and an improving labor market are providing a boost for residential real estate, which is a source of strength for the expansion.
“The recent run up in prices probably has a lot to do with the lack of supply,” said Mark Vitner, a senior economist at Wells Fargo Securities LLC in Charlotte, North Carolina. “The more attention that home price gains get, more and more people will realize it’s a good time to sell their home.”
Estimates for the year-over-year price change ranged from increases of 8.5 percent to 9.3 percent, according to the 27 economists surveyed. The Case-Shiller index is based on a three- month average, which means the February figure was influenced by transactions in January and December.
Stock-index futures were little changed after the figures, with the contract on the Standard & Poor’s 500 Index expiring in June falling 0.1 percent to 1,587.2 at 9:29 a.m. in New York.
Monthly Gain
Home prices adjusted for seasonal variations rose 1.2 percent in February from the prior month after climbing 1 percent in January. Las Vegas showed the biggest adjusted monthly increase, with prices climbing 2 percent. San Francisco, Phoenix and Los Angeles home prices advanced 1.8 percent.
Unadjusted prices climbed 0.3 last month from February as 11 of 20 cities showed increases.
The year-over-year gauge provides better indications of trends in prices, according to the S&P/Case-Shiller group. The panel includes Karl Case and Robert Shiller, the economists who created the index.