Home Prices Rising Faster Than Expected

With the release of the latest home price index from S&P/Case-Shiller, all signs point towards a speedy housing recovery. While unemployment rates and lackluster consumer confidence continue to be a lag on the U.S. economy, the housing sector is a definite bright spot, spurring economic growth.

For the fourth consecutive month, prices for single-family houses have risen across 20 American cities. Average home prices rose 1.5 percent in July, surpassing economists’ predictions by .2 percent. The increase is also over 6 percent higher than the index recorded in March of this year. 

This upward trend adds to the growing consensus that the housing market has finally bottomed out and is on the mend. Last spring, home values were depreciating nationally, but have since rebounded, though they remain 30 percent below their value in 2006.

“Stronger housing numbers are a positive factor for other measures including consumer confidence,” said David Blitzer, chairman of the S&P index committee.