"The best news was that the situation was really improving and gaining speed at a time when the economy was pretty much struggling"
- Patrick Newport, an economist at IHS Global Insight
A gauge of home prices in the world's largest economy rose for the tenth month in a row, as buyers competed for a dwindling inventory of properties, the report by the Federal Housing Finance Agency showed on Wednesday. Home price index jumped 0.6% on a seasonally adjusted basis from a month earlier, after the same gain in the previous month. On a yearly basis, home prices were up 5.6%. Sales of existing homes fell 1% in December to a 4.94 million annual rate, due to the tight supply of available properties. Wednesday's reading is giving mixed signals, suggesting that consumers are still concerned about the economic outlook and are showing reluctance to increase spending and as a result, are slowing the healing of the property market.
"The best news was that the situation was really improving and gaining speed at a time when the economy was pretty much struggling," Patrick Newport, an economist at IHS Global Insight in Lexington, Massachusetts, said before the report.
"The only concern going into 2013 is the inventory situation," Lawrence Yun, NAR chief economist, said in a news conference today as the figures were released. "Price increases are almost guaranteed going into 2013."
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