WASHINGTON (2/27/13)--U.S. home prices in 20 cities increased in December, while 2012 saw the largest yearly rise in seven years, according to the S&P/Case-Shiller 20-city composite index.
The index of property values rose 6.8% in from December 2011--the largest year-to-year increase since July 2006. It follows a 5.4% gain in November from a year earlier (MarketWatch and Bloomberg.com Feb. 26).
The index recorded a 0.2% rise in December, following a 0.1% decrease in November. With seasonal adjustments, home prices rose 0.9% in December.
Borrowing costs that are near a record-low and employment gains are stoking demand and bolstering property values, while foreclosures lessen and the number of homes on the market declines, Bloomberg said.
That improvement is building up confidence and the net worth of households--which may fortify consumer spending, even though take-home pay is being eroded by a payroll-tax increase, Bloomberg added.
Now is a good time to buy a home because of high affordability, attractive prices and low mortgage-interest rates, Brain Jones, a senior U.S. economist at Societe Generale in New York, told Bloomberg. The key is that positive economic forces are not coming just from a single area, but are broadly based nationwide, he added.