Economy Watch: Housing Prices Spike in Most Markets
- May 29, 2013
All three S&P/Case-Shiller Home Price composites indices, which were published by S&P Dow Jones Indices on Tuesday, showed double-digit annual increases for the three months ending in March. The 10-city and 20-city composites increased year-over-year by 10.3 percent and 10.9 percent, respectively, with the national composite rising by 10.2 percent. All 20 cities posted positive annual growth.
During the first quarter of 2013, the national composite rose by 1.2 percent, while on a monthly basis, the 10- and 20-city composites both posted increases of 1.4 percent. The Charlotte, Los Angeles, Portland, Seattle and Tampa MSAs recorded their largest month-over-month gains in over seven years.
“Home prices continued to climb,” David M. Blitzer, chairman of the Index Committee at S&P Dow Jones Indices, notes. “Home prices in all 20 cities posted annual gains for the third month in a row. Twelve of the 20 saw prices rise at double-digit annual growth, and the national index and the 10- and 20-city composites posted their highest annual returns since 2006.”
Phoenix again had the largest annual increase at 22.5 percent, followed by San Francisco with 22.2 percent and Las Vegas with 20.6 percent, according to the report. Miami and Tampa saw annual gains of 10.7 percent and 11.8 percent. The weakest annual price gains were seen in New York (up 2.6 percent), Cleveland (up 4.8 percent) and Boston (up 6.7 percent). “[But] even these numbers are quite substantial,” Blitzer says.
Consumer confidence up again
The Conference Board reported on Tuesday that its Consumer Confidence Index, which had improved in April, increased again in May, very likely on the strength (mostly) of positive housing reports. The index now stands at 76.2 (the happy year 1985 = 100), up from 69 in April. The present situation index increased to 66.7 from 61, while the expectations index improved to 82.4 from 74.3 last month.
Consumers felt better about current conditions in May than April: those saying business conditions are “good” increased to 18.8 percent from 17.5 percent, while those believing that business conditions are “bad” decreased to 26 percent from 27.6 percent. Consumers’ assessment of the labor market was also more positive. Those claiming jobs are “plentiful” increased to 10.8 percent from 9.7 percent, while those asserting that jobs are “hard to get” edged down to 36.1 percent from 36.9 percent.
“Consumer Confidence posted another gain this month and is now at a five-year high,” Conference Board director of economic indicators Lynn Franco says. “Back-to-back monthly gains suggest that consumer confidence is on the mend and may be regaining the traction it lost due to the fiscal cliff, payroll-tax hike and sequester.” The Conference Board puts together the index based on a probability-design random sample conducted by Nielsen, with a cutoff date this month of May 15 for preliminary results.
Wall Street was giddy with the housing numbers on Tuesday, with the Dow Jones Industrial Average up 106.29 points, or 0.69 percent. The S&P 500 advanced 0.63 percent and the Nasdaq gained 0.7 percent.