Home prices climbed more than forecast in October, indicating a rebounding real-estate market will bolster the U.S. economy for the first time in seven years.
The S&P/Case-Shiller index of property values in 20 cities increased 4.3 percent from October 2011, the biggest 12-month advance since May 2010, the group said today in New York. The median forecast of 30 economists in a Bloomberg survey projected a 4 percent gain.
Property values will probably keep heading higher as record-low mortgage rates, a growing population and an improving economy spur demand for housing. The turnaround in real estate is buoying household confidence and wealth, one reason why consumer spending is improving even as concern mounts that lawmakers will fail to stave off looming tax increases.
“The housing market is definitely starting to recover,” said Ryan Wang, an economist with HSBC Securities USA Inc. in New York, who’s the second-best forecaster of the S&P/Case- Shiller index over the past two years, according to data compiled by Bloomberg. Higher property values have “added about a trillion dollars to household wealth just since the beginning of this year.”read entire article