NEW YORK • Home prices in 20 cities in the United States rose at a slower pace than projected in April, indicating the market was experiencing uneven gains as it entered the busier selling season.
The S&P/Case-Shiller index of property values increased 4.9 per cent from April last year after climbing 5 per cent in the year ended in March, the group announced yesterday. The median estimate of 31 economists surveyed by Bloomberg called for a 5.5 per cent advance. Nationally in the US, prices rose 4.2 per cent.
A pickup in sales as the job market improves and younger Americans start venturing out on their own means gains in home prices will probably accelerate as demand outstrips supply.
Rising residential real estate values will, in turn, help the owners rebuild equity and spur builders to take on more such projects, leading to increases in spending and investment that will give the American economy a needed boost.
"There's no reason to think home prices won't continue to rise at a decent clip," Mr Joe LaVorgna, chief US economist at Deutsche Bank Securities in New York, said before the report.
Economists' estimates in the Bloomberg survey ranged from gains of 4.7 per cent to 5.8 per cent. The S&P/Case-Shiller index is based on a three-month average, which means the April figure also was influenced by transactions in March and February.
Home prices in the 20-city index adjusted for seasonal variations increased by 0.3 per cent in April this year from the prior month, less than the Bloomberg survey median of 0.8 per cent.
All 20 cities in the index showed a year-over-year gain, led by a 10.3 per cent increase in Denver. Prices rose 10 per cent in San Francisco.
The price increases decelerated in 11 cities in April from the same time last year.
The year-over-year gauge, based on records dating back to 2001, provides a better indication of trends in prices, the group has said. The panel includes economists Karl Case and Robert Shiller, who created the index.
Measured against a month earlier, property prices rose in 11 cities in April, according to the seasonally adjusted data. They jumped 1 per cent in Minneapolis. The biggest decrease was in Cleveland, where they fell 0.5 per cent. Values were little changed in Tampa.
A dearth of housing supply is keeping prices in most areas rising as more Americans consider home purchases. While the number of previously owned homes for sale rose 1.8 per cent in May to 2.3 million, at the current sales pace, it would take 5.1 months to sell those houses, National Association of Realtors data shows.
That is down from 5.2 months at the end of the prior month.