Price index rises for 2nd straight quarter

A U.S. home-price index posted its second consecutive quarterly increase, rising 3.1 percent in the third quarter, according to a report released today.

The U.S. National Home Price Index, which covers all nine U.S. Census divisions and is a part of the Standard & Poor's/Case-Shiller Home Price Indices was down 8.9 percent, though, on a year-over-year basis.

This year-over-year decline in the third quarter is markedly lower than the 14.7 percent decline reported in the second quarter and smaller still than the 19 percent year-over-year drop in the first quarter, according to the report.

A separate, monthly index, the 20-City Composite Home Price Index, posted an annual decline of 9.4 percent. And the monthly index has experienced gains in its annual rates of return during every month since the beginning of the year.

September saw a 0.3 percent increase from August's levels, for example (see story).

As of third-quarter 2009, U.S. home prices have returned to their August 2003 levels, according to the index.

"We have seen broad improvement in home prices for most of the past six months," said David M. Blitzer, chairman of the Index Committee at Standard & Poor's.

"However, the gains in the most recent month are more modest than during the seasonally strong summer months. Fewer cities saw month-to-month improvements in September than in August in both seasonally adjusted and unadjusted figures."

Also this week, the National Association of Realtors reported that sales of existing U.S. homes rose substantially and inventories shrank in October. Home sales surged 10.1 percent compared to September and 23.5 percent compared to October 2008.

The first-time homebuyer tax credit drove the unexpectedly rosy figures, says the National Association of Realtors. Originally set to expire this month, the U.S. government recently extended the $8,000 tax credit until April 30, 2010, easing concerns about a drop-off in homebuyer activity. ...CONTINUED

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