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June 1, 2013

Home prices in largest cities post big increase in March

Home prices in the largest U.S. cities are recovering at boom-era levels, with a closely watched index posting its strongest increase in close to seven years.

Tight housing supply and strong demand continued to fuel a robust market recovery in March, with the Standard & Poor’s/Case-Shiller index of 20 U.S. cities recording a 10.9 percent year-over-year increase.

That was the strongest increase since April 2006. The index was up 1.4 percent from the prior month.

A separate national index showed home prices rising 10.2 percent year-over-year at the end of the first quarter.

The price increases mean that a housing recovery that began last year is gaining momentum. The cities of Charlotte, N.C.; Los Angeles; Portland, Ore.; Seattle; and Tampa, Fla., posted their biggest month-over-month gains in more than seven years.

On an annual basis, the recovery has been widespread, with every metro area tracked by the survey posting year-over-year gains for the past three consecutive months. Home prices, as gauged by the 20-city index, are now about 29 percent off their peak.

The Phoenix area had the largest annual gain, up 22.5 percent in the first quarter compared to the year before. San Francisco was not far behind, posting a 22.2 percent gain. Once-downtrodden metro areas showed huge jumps, with Las Vegas up 20.6 percent; Atlanta, 19.1 percent; Detroit, 18.5 percent; and Los Angeles, 16.6 percent.

The housing recovery began last year as foreclosures waned, low mortgage interest rates lured buyers back to the market, and inventory remained tight. Investors have also played a big role in the market, snapping up homes on the cheap to flip or rent out.

Visit the Los Angeles Times at www.latimes.com. Distributed by MCT Information Services.

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