Homes See Biggest Price Gain in Years, Propelling Stocks
By CATHERINE RAMPELL, NYT
The United States experienced another round of broad-based home price gains in March, reinforcing the housing recovery’s important role in driving economic growth.
All 20 cities tracked by the Standard & Poor’s Case-Shiller home price index posted year-over-year gains, as they have done for three consecutive months now. The 20-city composite index rose 10.9 percent over the last year. That is the biggest annual increase since April 2006. Several cities – Charlotte, N.C.; Los Angeles; Portland, Ore.; Seattle; and Tampa, Fla. – had their largest month-over-month gains in more than seven years.
Continued strength in the housing market is welcome news for the rest of the economy, particularly given federal government spending cuts that went into effect in March and the end of the payroll tax holiday in January. With home values rising, the construction industry has been more motivated to ramp up building and hire back workers. Consumers are also feeling wealthier and so are more willing to spend money.
“We’ve been sort of pleasantly surprised by the resilience of consumption at the beginning of the year,” said Daniel Silver, an economist at JPMorgan Chase. “Spending has been doing quite well, at least for this expansion, over the first half of the year, due in part to these wealth effects.”
(More here.)
The United States experienced another round of broad-based home price gains in March, reinforcing the housing recovery’s important role in driving economic growth.
All 20 cities tracked by the Standard & Poor’s Case-Shiller home price index posted year-over-year gains, as they have done for three consecutive months now. The 20-city composite index rose 10.9 percent over the last year. That is the biggest annual increase since April 2006. Several cities – Charlotte, N.C.; Los Angeles; Portland, Ore.; Seattle; and Tampa, Fla. – had their largest month-over-month gains in more than seven years.
Continued strength in the housing market is welcome news for the rest of the economy, particularly given federal government spending cuts that went into effect in March and the end of the payroll tax holiday in January. With home values rising, the construction industry has been more motivated to ramp up building and hire back workers. Consumers are also feeling wealthier and so are more willing to spend money.
“We’ve been sort of pleasantly surprised by the resilience of consumption at the beginning of the year,” said Daniel Silver, an economist at JPMorgan Chase. “Spending has been doing quite well, at least for this expansion, over the first half of the year, due in part to these wealth effects.”
(More here.)
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