Residential real-estate prices increased in the year ended August by the most in two years, a sign housing will continue to boost U.S. economic growth.
The S&P/Case-Shiller index of property values in 20 cities rose 2 percent from August 2011, the biggest year-to-year gain since July 2010, after climbing 1.2 percent the prior month, the group said today in New York. The median forecast of 25 economists in a Bloomberg survey projected a 1.9 percent gain.
The stabilization in values is rippling through the economy after the housing slump helped trigger the recession, supporting gains in consumer confidence and spending that are benefitting companies such as Loweâ€™s Cos. Inc. (LOW) and Whirlpool Corp. (WHR) Federal Reserve policy makers have promised to keep interest rates low through mid 2015 to spur growth and reduce unemployment.
â€œThe housing recovery has had modest momentum,â€ said Anika Khan, a senior economist at Wells Fargo Securities LLC in Charlotte, North Carolina, a subsidiary of the largest U.S. mortgage lender. â€œWe still are looking for housing improvement and think that trend will continue.â€
Estimates in the Bloomberg survey ranged from gains of 1.5 percent to 3.1 percent. The Case-Shiller index is based on a three-month average, which means the August data were influenced by transactions in June and July.
All U.S. equity markets are closed again today in the aftermath of Sandy, the Atlantic superstorm that slammed into the East Coast. It was the first shutdown for stock markets in consecutive days due to weather since 1888. The Securities Industry and Financial Markets Association said bond trading will also be suspended today.
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