According to Standard & Poor’s/Case-Shiller home price index, the cost of homes is increasing in 19 out of the 20 cities it monitors monthly. The increases were seen in April, when compared to March. Increasing home costs indicates progress in the stressed market. However, jobless numbers stay high, holding back greater recovery.
Index increasing every month
Homes increased 2.3 percent from March to April in Phoenix, which is where the home price increase was the best. There were huge increases in San Francisco and Washington as well. The only major market that showed a drop was Detroit, and that was a 2.1 percent decrease. The only major market that showed a price drop in the index was Detroit with a 2.1 percent decrease. The biggest home price increase came at 2.3 percent in Phoenix from March to April. San Francisco and Washington were the next highest price boosts seen in the index.
Fannie Mae and Freddie Mac are overseen by the Federal Housing Finance Agency. The bureau said that from April 2011 to April 2012, there was a 3 percent increase in home costs.
Phoenix also had the greatest year-over-year increase, with costs increasing by 8.6 percent.
There are still a very low number of properties available, and the numbers of houses that used to be occupied that are for sale are lower than has been seen since 2006.
In the industry, there has been increased interest. There have also been more building permits requested than there have been in over three years.
The Great Recession was precipitated by the bottom falling out of the housing industry. Home prices have to come up in order to sustain demand in the real estate market. House sales are on the rise partly because of efforts by the Federal Reserve to keep long-term rates on mortgages at record lows.
The S&P/Case-Shiller monthly index monitors house costs in Boston, Chicago, Denver, Las Vegas, Los Angeles, Miami, New York, San Diego, San Francisco, Washington DC, Atlanta, Charlotte, Cleveland, Dallas, Detroit, Minneapolis, Phoenix, Portland, Seattle, and Tampa. According to the index, it covers around half of the nation’s properties.
The costs are compared with those in 2000 before the mortgage crisis, and the average over three months are taken.
Recovery hard with unemployment
Meanwhile, the unemployment rate continues to hover at 8.2 percent, holding back a quicker economic recovery. A modest average of 73,000 jobs was added monthly to the nation’s economy in April and May. A more-encouraging average of 226,000 was added each of the first quarter of the year.
If the job market does not improve, some economists worry that it could slow down the housing industry just when it is starting to gain strength. Last week, Federal Reserve Chairman Ben S. Bernanke said the economy wasn’t improving, in spite of improvements in housing. Meanwhile, the Federal Reserve continues to snatch up securities to keep long-term interest rates low.