U.S. Home Prices Rise Slightly More Than Expected In November

(RTTNews) - Home prices in major U.S. metropolitan areas rose by slightly more than expected in the month of November, according to a report released by Standard & Poor's on Tuesday.

The report said the S&P/Case-Shiller 20-City Composite Home Price Index rose 0.9 percent on a seasonally adjusted basis in November compared to a 1.1 percent increase in October. Economist had expected the index to increase by 0.8 percent.

However, on a non-seasonally adjusted basis, the 20-City Composite Home Price Index edged down by 0.1 percent in November after inching up by 0.2 percent in the previous month.

The 20-City Composite Home Price Index increased at an annual rate of 13.7 percent in November, reflecting a modest acceleration from the 13.6 percent growth seen in October. The year-over-year growth matched economist estimates.

Peter Boockvar, managing director at the Lindsey Group, said, "Bottom line, for those that already own homes and for the balance sheets of many financial institutions, these price gains are welcome but the strong pace of increases have priced out many first time home buyers who are losing out to all cash investor buyers."

"I do expect these double digit increases to moderate to mid-single digit in 2014 and hopefully over time without the influence of the Fed, home price increases will track income growth," he added.

The Commerce Department released a separate report on Monday showing a much steeper than expected drop in new home sales in December.

The report said new home sales tumbled 7.0 percent to an annual rate of 414,000 in December from the revised November rate of 445,000. Economists had expected sales to dip to 455,000 from the 464,000 originally reported for the previous month.

With the steep drop, new home sales pulled back further off the rate of 463,000 seen in October, which was the highest since July of 2008.