The S&P/Case-Shiller index of property values in 20 cities dropped 1.9% in April from the same month in 2011, the smallest decline since November 201-, after decreasing 2.6% in the year ended March, the group said Tuesday in New York. The median forecast of 28 economists in a Bloomberg News survey projected a 2.5% drop.
A turnaround in prices is a necessary step toward luring more buyers and sustaining demand for housing, which is starting to stabilize after precipitating the last recession almost five years ago. Record-low borrowing costs, due in part to Federal Reserve efforts to hold down long-term rates, may keep promoting home sales in the presence of an 8.2% unemployment rate.
The Case-Shiller index is based on a three-month average, which means the April data was influenced by transactions in March and February.
Home prices adjusted for seasonal variations climbed 0.7% in April, matching the prior month’s gain, which was revised up from a previously reported 0.1% increase. It was the best back-to-back gain since mid-2009. Unadjusted prices increased 1.3% in April as 19 of 20 cities showed gains.