Real Estate

US home prices up less than forecast in April: S&P/Case-Shiller

Reuters With CNBC
Shiller: Puzzling housing outpacing expectations

U.S. single-family home prices rose less than expected in April, a closely watched survey said on Tuesday.

The S&P/Case-Shiller composite index of 20 metropolitan areas gained 0.2 percent in April on a seasonally adjusted basis. A Reuters poll of economists forecast a gain of 0.8 percent following gains of 1.2 percent in March.

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Robert Shiller, co-founder of the Case-Shiller index and a professor of economics at Yale University, said on "Squawk on the Street" that he remains bullish on the housing recovery.

"The housing market is actually better than public perception," he said. "There has been a lot of momentum, upward momentum, and I'm not sure that that's gone."

He added: "The market is going up faster than people perceive it. It's actually a better market than people think and expectations are not really very high yet for home price increases."

Non-seasonally adjusted prices rose 1.1 percent in the 20 cities, compared to an expectation of a 0.8 percent rise.

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"Near term economic factors favor further gains in housing," said David Blitzer, chairman of the index committee at S&P Dow Jones Indices, in a statement. "However, housing is not back to normal: prices are being supported by cash sales, low inventories and declining foreclosure and REO (Real Estate Owned) sales. First time home buyers are not back in force and qualifying for a mortgage remains challenging."

Prices in the 20 cities rose 10.8 percent year over year, shy of expectations for 11.6 percent.

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The seasonally adjusted 10-city gauge was unchanged in April versus a 1.2 percent gain in March, while the non-adjusted 10-city index rose 1.0 percent in April compared to a 0.8 percent gain in March.

Year-over-year, the 10 city gauge also rose 10.8 percent.

Prof. Shiller told CNBC he felt prices "went up way too high in 2006 and they came down like 50 percent, and now they're going up. They look about right and you know, I hope people just don't get so worked up about them."

By Reuters. CNBC contributed to this report.

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