UPDATE: Home Prices Rise In January, Regulator Says
March 24 2009 - 12:28PM
Dow Jones News
A regulator says U.S. home prices rose in January, a favorable
sign in a housing crisis that has driven down asset values
sharply.
Prices climbed 1.7% on a seasonally adjusted basis from December
to January, according to the Federal Housing Finance Agency on
Tuesday.
But analyst Abiel Reinhart of JPMorgan Chase Bank expressed
caution over the increase.
"Part of the reason for the unexpected rise in January prices
was that a disproportionate share of sales during the month
occurred in stronger housing markets," said Reinhart. "With
inventories of existing homes still extremely elevated, we expect
that the FHFA price index will likely show renewed declines in
coming months."
December's previously reported 0.1% increase was revised to a
0.2% decline.
For the 12 months ending in January, U.S. prices fell 6.3%. The
index is 9.6% below its April 2007 peak.
The small increase in January suggests prices might stop their
long descent and push consumers from the sidelines into the
purchase of a home.
The FHFA monthly index is calculated using purchase prices of
houses backing mortgages that have been sold to or guaranteed by
Fannie Mae (FNM) or Freddie Mac (FRE).
-By Jeff Bater, Dow Jones Newswires; 202-862-9249;
jeff.bater@dowjones.com