US house prices up for fifth month

US house prices rose in October for the fifth month in a row, according to a leading index.

Prices were 0.4% higher than they were in September on a seasonally-adjusted basis, the Standard & Poor’s/Case-Shiller Home Price index said.

And confidence among US consumers has shown a larger-than-expected rise.

Improved optimism over the jobs market saw consumer confidence hit a three-month high in December, according the Confidence Board.

The recovery in the housing market continues to be uneven, with only 11 of the 20 cities tracked showing house price gains. On a yearly basis, prices were 7.3% lower.

The index records the prices of homes in 20 of the largest cities in the US.

On a non-seasonally-adjusted basis, prices were flat and the index committee was cautious about the possibility of a “second dip” back into recession.

“All in all, this report should be described as flat,” said David Blitzer, chairman of the index committee at Standard & Poor’s.

“Coming after a series of solid gains, these data are likely to spark worries that home prices are about to take a second dip.

“Before jumping to conclusions, recognise that the one time that happened at the beginning of the 1980s, Federal Reserve policy saw dramatic reversals, which is very different from the stable and consistent Fed policy we have today.”

An unexpectedly sharp rise in US consumer confidence is likely to reassure investors.

The Confidence Board’s index of consumer attitudes rose to 52.9 in December – beating the analysts’ average forecast of 52.5.

Consumer confidence for November was also revised up, and index measuring consumers’ expectations for the economy reached a two-year high.

US stocks reacted positively to the news, with the Dow Jones Industrial average rising in early trading.

Source: BBC News

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