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U.S. Home Price Indexes Rise In December

By Kitco News
Tuesday February 25, 2014 9:00 AM

Editor's Note: The article was updated to include comments from David Blitzer, chairman of the index committee and CIBC.

(Kitco News) - U.S. home prices are on the rise, according to separate data compiled by two organizations and despite recent data that shows a slowing in home sales.

The S&P/Case-Shiller Housing indices for the 10 and 20 largest cities in the U.S. showed that home prices increased 13.6% and 13.4% respectively, year-over-year in December, slightly down compared to November's annual increase of 13.6%. According to media sites, economists were forecasting an increase between 12% and 13.6%.

Looking at the monthly data, the report said the 10-city index remained relatively unchanged in December and the 20-city index showed its second monthly decline 0.1%.

David Blitzer, chairman of the index committee at S&P Dow Jones Indices said that December's data was the best end-of-year since 2005; however, he added that gains are slowing on a month-to-month basis.

“Recent economic reports suggest a bleaker picture for housing. Existing home sales fell 5.1% in January from December to the slowest pace in over a year. Permits for new residential construction and housing starts were both down and below expectations. Some of the weakness reflects the cold weather in much of the country. However, higher home prices and mortgage rates are taking a toll on affordability," said Blitzer in the report.

At the same time, the Federal Housing Finance Agency said that its Housing Price Index rose 1.2 % quarter-over-quarter. On an anual basis, the agency said that home prices rose 7.7%.

On a monthly basis, the agency said the home price index rose 0.8% in December, compared to November’s revised increase increase of 0.1%. Economists were forecasting a rise of 0.4%.

Both reports are slightly backward looking compared to recent data. On Friday the National Association of Realtors reported that homes priced increased 10% in January, year-over-year. The association said in its report the median home price hit $188,900.

The association also reported that existing home sales fell 5.1% to a seasonally adjusted annual rate of 4.62 million in January, a decrease from December’s annual sales rate of 4.82 million.

By Neils Christensen of Kitco News; nchristensen@kitco.com



Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.
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