By Shobhana Chandra
Oct. 27 (Bloomberg) — Home prices in 20 U.S. cities rose in August for a third consecutive month, bolstering the case that an economic recovery is at hand.
The S&P/Case-Shiller home-price index climbed 1 percent from the prior month, seasonally adjusted, after a 1.2 percent increase in July, the group said today in New York. From a year earlier, the gauge fell 11.3 percent, less than forecast.
Rising home sales, due in part to government programs including the first-time buyer credit and efforts to lower borrowing costs, have helped stem the slump in property values that precipitated the worst recession since the 1930s. Sustained gains in household spending, the biggest part of the economy, may be harder to come by as joblessness mounts.
“We’re nearing the bottom in home prices,” said Patrick Newport, an economist at IHS Global Insight in Lexington, Massachusetts. “Right now the government is helping to stabilize housing.”
The next problem will be the suffering at the high end of the market and the effect it will have on the economy. I don’t know what the Government will do about that.