Home prices make largest yearly gains in six years

By Vicki Needham - 01/29/13 11:29 AM ET

Home prices picked up pace in November, showing the largest yearly gains since the housing market crashed about six years ago.

Prices increased 5.5 percent in November compared with the same month a year ago, boosted by a contraction in inventory, according to the Standard & Poor's/Case-Shiller 20-city home price index released Tuesday.

In year-over-year figures, prices rose in 19 of the 20 cities in November, falling in New York.

“Housing is clearly recovering," said David Blitzer, chairman of the Index Committee at S&P Dow Jones Indices. "Prices are rising as are both new and existing home sales."

Prices also rose 4.5 percent for the 10-city index on an annual basis.

Phoenix led the way with the fastest price increase, up 22.8 percent in 12 months, posting its seventh consecutive month of double-digit annual returns.

Prices were up 12.7 percent in San Francisco, 11.9 percent in Detroit and 10 percent in Las Vegas, the epicenter of the housing market's collapse.

Separate reports have shown that existing home sales in November hit their highest point since November 2009, while new home sales were the best since June 2010.

"These figures confirm that housing is contributing to economic growth," Blitzer said.

As of November, average home prices across the United States are back to their fall 2003 levels for both indexes.

While the annual prices were up, the 10- and 20-city indexes showed monthly declines of 0.2 percent and 0.1 percent, respectively. The monthly figures aren't seasonally adjusted and reflect a typical weak winter market, Blitzer said.

“Winter is usually a weak period for housing, which explains why we now see about half the cities with falling month-to-month prices compared to 20 out of 20 seeing rising prices last summer," Blizter said.

In November, 10 cities posted monthly price gains — Atlanta, Denver, Las Vegas, Los Angeles, Miami, Minneapolis, Phoenix, San Diego, San Francisco and Seattle.

Overall, the Southwest — Las Vegas and Phoenix — are staging a strong comeback, with the Southeast — Miami and Tampa — close behind.

The Sun Belt, which bore the brunt of the housing collapse, is taking the lead, while California is improving.

The Northeast and industrial Midwest are still lagging.