WASHINGTON U.S. home prices rose in most major cities in October compared with a year ago, pushed up by rising sales and a decline in the supply of available homes. Higher prices show the housing market is improving even as it moves into the more dormant fall and winter sales period.
The Standard & Poors/Case-Shiller national home price index released Wednesday increased 4.3 percent in October compared with a year ago. Thats the largest year-over-year increase in 2 1/2 years, when a homebuyer tax credit temporarily boosted sales.
Prices rose in October from a year ago in 18 of 20 cities. Phoenix led all cities with a 21.7 percent gain, followed by Detroit, where prices increased 10 percent. Prices declined in Chicago and New York.
In the Charlotte-Gastonia-Rock Hill market, prices rose 4.1 percent.
Home prices fell in 12 of 20 cities in October compared with September. Monthly prices are not seasonally adjusted, so the decreases reflect the end of the peak buying season.
Still, the broader trend is encouraging. October marked the fifth straight month of year-over-year gains, after nearly two years of declines. Prices rose in mid-2010 in the final months before the tax credit expired. They had fallen sharply in 2008 and 2009.
It is clear that the housing recovery is gaining strength, said David Blitzer, chairman of the index committee at S&P Dow Jones Indexes.
The improvement in housing is adding to economic growth and most analysts expect that to continue in 2013.
But automatic tax increases and spending cuts that are set to take effect next week could drag down growth.
President Barack Obama and congressional lawmakers will return to Washington on Thursday to resume talks.
Prices nationwide have recovered to about the same level as in the fall of 2003, according to the Case-Shiller index.