Home prices rise again in October
NEW YORK (AP) – Home prices rose for the fifth month in a row in October, but the recovery is shaky with only 11 of the 20 metro areas tracked showing gains.
The Standard & Poor’s/Case-Shiller home price index released Tuesday edged up 0.4 percent to a seasonally adjusted reading of 145.36 in October from September. Without adjusting for seasonal factors the index was flat.
The index was off 7.3 percent from October last year, nearly matching expectations of economists surveyed by Thomson Reuters. Many economists, however, are predicting a double dip in prices this winter as foreclosures increase and government support wanes.
“I’d be very surprised if we don’t go below the lows we hit this year,” Dean Baker, co-director of the Center for Economic and Policy Research, a left-leaning Washington think tank. “We still have a very glutted housing market.”
The index is now up 3.4 percent from its bottom in May, but almost 30 percent below its peak in April 2006.
The federal government has stepped in with far reaching programs to create jobs and make homeownership more affordable.
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.
Besides a credit of up to $8,000 for first-time buyers, Congress expanded the program to include homeowners who have lived in their current properties for at least five years.