Home Prices Up More than 12 Percent
Home prices in the 20 largest US cities rose 12.1 percent in the year that ended in April, according to the Standard & Poor’s/Case Shiller index released Tuesday. Prices were also up 2.5 percent from March, according to the report. The index showed year-over-year improvements in property values in each of the 20 cities for the fourth month in a row. Several cities saw price gains of over 20 percent, including San Francisco at 24 percent, Las Vegas at 22 percent and Phoenix and Atlanta with gains of better than 21 percent. Also, 19 of the 20 cities included in the index saw prices rise from March, with home prices remaining flat in Detroit.
For several years now, interest rates have been at or near historically low levels thanks to government programs designed to do just that. But only over the past six months or so have home sales begun to increase, alleviating the inflated inventory created by the massive number of foreclosures driven by the recession. Last week, Federal Reserve President Ben Bernanke indicated that the central bank may begin winding down those stimulus measures later this year and conclude them as early as next summer. As a result, economists are now expecting interest rates to rise, though housing experts are confident the housing recovery is solid enough so that higher rates will not derail it.