The Standard & Poor’s/Case-Shiller home price index released Tuesday showed housing prices up 0.4 percent to a seasonally adjusted reading of 145.36 in October from September. That’s the 5th month in a row that the index has increased showing that recovery efforts have been at least somewhat successful in the residential real estate market.
Although a large supply of house still remain on the market, the upward trend in home prices and a improving employment outlook helped raise the Consumer Confidence Index as well. Home price gains since the summer reflect the rush of homebuyers trying to close their deals before the original expiration date of a federal tax credit. The Nov. 30 deadline was extended last month to April 30.
NAR chief economist, Lawrence Yun, is counting on the tax credit to provide temporary support for housing markets until the economy recovers enough to start fueling sales. He predicts price improvement in 2010 of more than 3%. “The headwind we face is rising mortgage interest rates,” Yun said, “but the compensating factors will be the homebuyers tax credit in the first half of the year and increased job creation in the second half.”
