Home Price Increase Exceeds Experts' Forecasts

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NEW YORK -- U.S. home prices picked up in April for the third month in a row, the latest indication a recovery in the housing market is gaining traction.

But in a sign of the struggles still facing the broader economy, separate data on Tuesday showed consumer confidence fell to its lowest level in five months in June as Americans' view of the economy in the coming months soured.

The Standard &Poor's/Case-Shiller composite index of 20 metropolitan areas gained 0.7 percent on a seasonally adjusted basis, topping economists' expectations for a 0.4 percent gain.

Compared to a year ago, home prices fell 1.9 percent in the 20 cities, above expectations for a decline of 2.5 percent, and an improvement from the 2.6 percent annual decline seen in March.

April's gain made for the longest streak of consecutive monthly gains since prices were boosted by the homebuyer tax credit from mid-2009 into early 2010.

"The housing recovery in this cycle has been painfully slow to develop, but it is unmistakably here," said Chris Low, chief economist at FTN Financial in New York.

"This time, unlike 2010 when the first-time homebuyer tax credit lifted sales, it is happening with only limited help from the government."

Recent data has pointed to a housing market that has finally hit bottom and is stabilizing, including a report on Monday that showed new home sales hit a two-year high in May.

A Long Way to Go

Still, the housing market has a long way to go before full recovery as it faces a large pipeline of foreclosures, tight credit restrictions and weak demand.

Even as the housing market is firming, the broader economy is struggling under the weight of a sluggish labor market and fears over the fallout of Europe's debt crisis.

The Conference Board, an industry group, said its index of consumer attitudes fell to 62.0 from a downwardly revised 64.4 in May, falling short of economists expectations. It was the lowest level since January.

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Cities Where the Future Looks Bright
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Home Price Increase Exceeds Experts' Forecasts

For years, Brooklyn took a backseat to its towering neighbor, Manhattan -- but no longer.

Today, Brooklyn is one of the fastest growing cities with a population of about 2.5 million, making it the most populous borough in New York and independently one of the largest cities in the U.S.

This hipster-friendly borough attracts young chefs, artists, entrepreneurs, families and more, who have opened farm-to-table restaurants, cool art galleries and boutiques, and trendy shopping areas like the Brooklyn Flea and Dekalb Market. With amazing cultural venues like the Brooklyn Academy of Music and the Brooklyn Museum, and the addition of the Barclays Center, NYC’s newest sports and entertainment venue, the area is bound to continue to develop and gentrify.

Find homes for sale in Brooklyn.

Seattle picked up momentum back in the ‘90s when Kurt Cobain popularized the grunge trend and a little coffee shop called Starbucks began to gain traction.

Today the city continues to attract young people and was recently ranked the best place for young professionals to thrive, according to mobile events company timeRAZOR, thanks to its high number of bars and restaurants (numbering over 6,000) and its high median income (the average college graduate there earns $53,185 annually).

Seattle was also ranked one of the 10 Cities With the Fastest Growing Wages in America. Home to major corporations Microsoft, Amazon and Boeing, and tech startups like Facebook and Zynga (which recently opened offices there), the city will continue to attract young, creative professionals in the next few decades.

Find homes for sale in Seattle.

This college town was recently ranked the Next Biggest Boomtown in the U.S. by Forbes.

It’s the third fastest-growing city in the U.S., according to the Census Bureau, with high rates of job creation.

Austin is also a hip, artsy college town that attracts artists, students, intellectuals and creative types. The thriving live music scene and Tex-Mex food add to the allure, ensuring that people will continue to call Austin home.

Find homes for sale in Austin, Texas.

With its laid-back outdoorsy lifestyle, organic restaurants, hip coffee shops, and a featured role on the IFC show Portlandia, Portland has become a popular destination for young twenty-somethings.

According to a recent YPulse survey, more and more millennials are opting to live in small cities, like Portland.

This small, creative city was ranked the number one green city in the US by the Mother Nature Network, and it's also one of the most bike-friendly cities in the US.

Find homes for sale in Portland, Ore.

Boulder is fast becoming the newest tech center with a thriving community of startups, earning it the nickname of Silicon Flatirons.

In fact, there are so many new jobs here, with at least 50 tech companies hiring, that the organizers of Boulder Startup Week paid for people to fly to Boulder to fill these open jobs.

Boulder is widely regarded as one of the healthiest and happiest cities in the U.S., according to Gallup, thanks to the active outdoor lifestyle and the thriving intellectual community that comprises this college town.

Find homes for sale in Boulder, Colo.

This charming city attracts college students, families, and immigrants, with its job prospects, safety, affordable housing, and short commutes.

As a result, Raleigh was ranked the No. 1 city for business and careers by Forbes, with the fastest growing job market in the U.S. It’s also the fastest growing city in the U.S., according to the Census Bureau.

Find homes for sale in Raleigh, N.C.

After years of neglect and devastation -- sinking so low that the state of Michigan threatened to take it over -- Detroit is poised for a comeback.

According to a recent YPulse survey, more and more millennials are opting to live in small cities like Detroit.

These young idealists are moving back to Detroit, breathing new life into the downtrodden city with their small businesses, many of which are socially and environmentally responsible. The Urban Innovation Exchange showcases Detroit’s growing social innovation movement, promoting small businesses such as Recycle Here! and Food Lab Detroit. This type of optimism and innovation makes Detroit a city to watch.

Find homes for sale in Detroit.

The low housing prices, affordable lifestyle, and cool arts scene are attracting young people to Philadelphia.

These people are getting involved in the city through organizations like Young Involved Philadelphia and bringing a new sense of dynamism to it, with new restaurants, shops, galleries, and a cool music and arts scene.

The City of Brotherly Love has some of the best public art in the country. It's famous for its murals, which adorn buildings all around the city. The City of Philadelphia Mural Arts Program coordinates these murals, connecting artists to the community.

Philadelphia was also ranked one of the 10 Cities With the Fastest Growing Wages in America.

Find homes for sale in Philadelphia.

There used to be only one main reason to move to Nashville: country music. But that’s changed.

Nashville’s economy is booming, and the city has one of the fastest growing job markets in the U.S. Forbes ranked it as one of the Next Big Boom Towns in the U.S.

Between the steady job growth, the thriving music and culture scene, and the diverse population, the country music capital will continue to grow.

Find homes for sale in Nashville, Tenn.

Walmart, the second biggest American corporation according to the Fortune 500, is headquartered in this relatively small city in northwest Arkansas.

The Walmart campus and Walton family play a big role in the Bentonville culture. Walmart heir Alice Walton spent $800 million on the Crystal Bridges Museum of American Art, which was designed by architect Moshe Safdie and houses her vast personal collection.

As the Waltons continue to invest and Walmart continues to thrive, Bentonville will become a top city.

Find homes for sale in Bentonville, Ark.

This laid-back city epitomizes small-town charm, but it’s also emerging as a leader in sustainability.

Most restaurants here serve local organic fare, shops sell local Vermont-made products, and people shop for groceries in community-owned co-ops. Much of the food consumed in town comes from local farms or from the Intervale Center, a nonprofit organization that cultivates 350 acres of land to provide food for the city's  residents.

This environmentally-friendly city has turned its focus on sustainability into a form of economic self-reliance -- a model which will become increasingly more important in the years ahead.

Find homes for sale in Burlington, Vt.

Home to major tech companies Google, Microsoft, LinkedIn, Mozilla and more, Mountain View is arguably one of the most tech-centered cities in the world.

In fact the city is so tech-focused that there’s citywide free Wi-Fi, courtesy of Google, and the Computer History Museum.

With more and more startups finding a home here, this Silicon Valley hub is bound to continue to innovate and attract tech-savvy residents.

Find homes for sale in Mountain View, Calif.

With its affordable housing, thriving student population, emerging arts and hip-hop scenes, and fast-growing job market, Pittsburgh is quickly becoming the newest hipster haven.

The Steel City is attracting and retaining these young creative types with its cool cultural environment and thriving economy.

It was recently ranked the second-best performing city in the U.S. by the Metro Monitor from the Brookings Institute and one of the top cities in the U.S. where people are hiring, according to Gallup.

Find homes for sale in Pittsburgh.

With its active healthy lifestyle, its beautiful mountainous surroundings, and its thriving job market, Salt Lake City, recently ranked One of the 10 Best Cities for College Grads, will continue to attract eager young college graduates.

The city was also recently ranked One of the Fastest Growing Job Markets in the U.S.

Find homes for sale in Salt Lake City.

North Dakota is experiencing an oil boom, which could make Williston and the nearby towns one of the largest sources of petroleum in the country -- and that means unprecedented wealth in the years ahead.

The population has exploded as people flock there in droves to seek their fortunes, and although the city is undertaking a building frenzy, it hasn’t been able to keep up with the influx of wannabe oil workers.

This oil boom is both a blessing and a curse as it has meant overcrowding, traffic and a housing shortage, but Williston is frantically trying to keep up and will be an area to watch.

Find homes for sale in Williston, N.D.

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While consumers' assessment of their current situation improved, they were less upbeat about their expectations for the next six months. Fewer respondents expected business conditions or employment would improve in the coming months.

The index is down nearly 10 points from the peak hit in February. Consumer spending -- a major engine of economic growth during the housing boom -- accounts for about 70 percent of U.S. economic activity.

"It does reinforce that confidence continues to wane, which does keep pressure on the recovery," said Sean Incremona, economist at 4Cast Ltd in New York.

Financial markets saw little reaction to the data as investors had their attention on Europe after Spain's short-term borrowing costs nearly tripled at auction.

Copyright 2012 Thomson Reuters. Click for Restrictions.

See also:
Those Mortgages Blamed for Housing Crisis? They're Back

5 Things That Can Derail Your Home Sale


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