12% jump in home prices suggests broad recovery

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Posted: Wednesday, June 26, 2013 12:00 am

WASHINGTON (AP) — U.S. home prices jumped 12.1 percent in April from a year ago, the most since March 2006. More buyers and a limited supply of available homes have lifted prices in most cities across the country, a sign of a broad-based housing recovery.

The Standard & Poor's/Case-Shiller 20-city home price index released Tuesday also rose 2.5 percent in April from March, the biggest month-over-month gain on records dating to 2000.

All cities except Detroit posted gains in April from March. Prices rose from a year earlier in all 20 cities for the fourth straight month.

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David Blitzer, chairman of the index committee, said the housing recovery should continue even with mortgage rates rising. Borrowing rates have jumped after news last week that the Fed could slow its bond-purchase program, which is intended to keep long-term interest rates low.

“Home buyers have survived rising mortgage rates in the past,” Blitzer said, “often by shifting from fixed rate to adjustable rate loans.”

New-home sales rise more than forecast

Sales of new U.S. homes climbed more than forecast in May to the highest level in almost five years.

Purchases rose 2.1 percent to an annualized pace of 476,000 homes, the most since July 2008, the Commerce Department said Tuesday.

“The housing recovery is alive and well and has a long way to go,” said Joe LaVorgna, chief U.S. economist at Deutsche Bank Securities Inc. in New York. “It's given the economy, or will give the economy, a lot of oomph.”

Consumer confidence shows big gain

Confidence among U.S. consumers climbed in June to the highest level in more than five years, making it more likely spending will accelerate after cooling this quarter.

The Conference Board's index rose to 81.4, the highest since January 2008, from a revised 74.3 in May, data from the New York-based private research group showed Tuesday.

Orders for goods top projections

Orders for U.S. durable goods rose more than forecast in May, reflecting broad-based gains that signal manufacturing is stabilizing.

Bookings for goods meant to last at least three years climbed 3.6 percent for a second month, the Commerce Department said Tuesday. Excluding transportation gear, where demand is volatile month to month, orders advanced 0.7 percent, also topping projections.

“This is the missing piece for an upswing in economic activity,” said Millan Mulraine, director of U.S. rates research at TD Securities USA LLC in New York.

© 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.



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