An index of home prices in 20 U.S. cities rose in October for a fifth consecutive month, putting the housing market and economy farther down the path to recovery.
The S&P/Case-Shiller home-price index increased 0.4 percent from the prior month on a seasonally adjusted basis, after a 0.2 percent rise in September, the group said Tuesday in New York. The gauge was down 7.3 percent from October 2008, the smallest year-over-year decline since October 2007. The median forecast of economists surveyed by Bloomberg News anticipated a 7.2 percent drop.
But October prices in Miami fell 0.4 percent from September and fell 14 percent from last October.
Tax credits for first-time buyers and mortgage rates that are less than a percentage point from record lows may prevent the market from retreating after sales jumped 35 percent over the first 11 months of 2009. Rising home and stock prices over the past two quarters enabled households to recover 28 percent of the record $17.5 trillion of wealth lost since mid-2007.
``Home prices have generally stabilized,'' John Canally, an economist at LPL Financial Corp. in Boston, said before the report. ``Consumers feel a little more comfortable when prices stop falling. That'll help consumer spending.''
The median forecast was based on projections from 31 economists surveyed. Estimates ranged for declines of 4.6 percent to 8 percent.
The seasonally adjusted 20-city index has been rising on a month-to-month basis since June, the first gain since it started dropping in June 2006.
Compared with the prior month, 11 of the 20 areas covered showed an increase on a seasonally adjusted basis while eight had a decline. The biggest month-to-month gain was in San Francisco, which increased 1.7 percent.
All of the 20 cities in the S&P/Case-Shiller index showed a smaller year-over-year decline than in September.
Karl Case, an economist professor at Wellesley College, and Robert Shiller, chief economist at MacroMarkets LLC and a professor at Yale University, created the home-price index based on research from the 1980s. Case this month announced his retirement from teaching.
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