U.S. Economy: Home Prices Increase by Most since 2005

Home values in 20 U.S. cities climbed in July by the most in almost four years, helping shoot the record push in household wealth that’s depressed spending.

A group disclosed in New York today that it is the biggest gain since October 2005 as the S&P/Case-Shiller home-price index rose 1.2 percent. Another report showed consumer confidence unexpectedly fell in September, while holding above the record low reached earlier this year.

Home values are jumping back as low borrowing costs and government tax credits lift home sales. Combined with rising stock prices, the gains will begin to restore the $13 trillion plunge in net worth caused by the worst financial crisis since the Great Depression, a process that economists such as Brian Bethune say will take years to complete.

Bethune, the chief financial economist at IHS Global Insight in Lexington, Massachusetts said that “the home prices are a major, major turning point for the economy; we are eating away at the problem of household balance sheets.”

The New York-based Conference Board’s consumer confidence index fell to 53.1 in September from 54.5 the prior month, the private research group said today, amid growing concern over the lack of jobs… Read More

Watch the video “In-Depth Look – Case-Shiller Home Price Index”

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