In more evidence that the housing market is recovering, the latest Case-Shiller/S&P Home Price Index shows that prices in most metro areas covered by the survey increased again in August, as compared to a year ago. The Index recorded a 1.2% average price gain in the 20 cities it covers, the fourth straight month that prices have climbed.
As with last month, the Minneapolis and San Francisco metro areas paced the increase, rising 3.2% and 2.8% respectively. Chicago, Los Angeles, Phoenix, and Washington D.C. all posted price gains of over 1% for August.
Despite the seeming strength coming back to the housing market, many analysts caution that the rise in prices may be temporary. Unemployment remains high, another wave of foreclosures may be in the offing, and an $8,000 first-time home buyer tax credit is scheduled to expire soon.
Some housing experts expect home prices to recover incrementally, following the pattern of the last few months. Getting back to the mid-2006 in home prices may still be a long way away.
The Case-Shiller index is widely considered one of the most accurate gauges of home prices because it compares recent home sales with previous prices for the same home. Last month the Index rose 1.6%.