October figures show steady growth
October figures show steady growth
The last report on home prices in 2013 is a reinforcement that the housing recovery is here to stay.
Home prices rose 13.6 percent in October across the nation, the highest gain in seven years, according to the Standard & Poor’s/Case-Shiller index released Tuesday morning. That was in line with analysts’ expectations and a continuation of the double-digit growth that housing values have enjoyed over the year.
Cities that posted the highest rate of growth compared with 2012 included Las Vegas (27 percent), San Francisco (24.6 percent) and Los Angeles (22.1 percent). Washington area home values were 7.4 percent higher than a year earlier.
Historically low mortgage rates spurred buyers to flock to the market in 2013, but they were met by an inventory crunch. This combination of pent-up demand and limited new construction pushed home prices higher all year.
The housing market was a driver of growth in the economic recovery through most of 2013. Rising home prices have lifted some of the hardest-hit regions out of the depths of the financial crisis, and economists expect more gains in 2014, although at a slower pace.
“Housing appears to be on a positive track as we turn the corner,” Lindsey Piegza, chief economist at the investment-banking and brokerage firm Sterne, Agee & Leach, wrote in a research note. “Going forward, job creation and income growth will further propel new homebuyers into the market place for 2014.”
On a monthly basis, prices rose at a slightly slower pace than September, by 0.2 percent.
— Amrita Jayakumar
Index: Consumer confidence improves
Consumer confidence jumped in December on a better outlook for hiring and overall growth, supporting other signs that show the economy could accelerate in 2014.
The Conference Board said Tuesday that its index of consumer confidence rose to 78.1 in December from 72 in the previous month. November’s figure was revised up from 70.4.
Consumer confidence is nearly back to where it was before the partial government shutdown in October. Steady job gains and a surging stock market have made Americans more optimistic about the economy and hiring both now and in the next six months.
“The upbeat consumer mood bodes well for spending in 2014,” said Michael Dolega, senior economist at TD Economics.
Optimism about the job market is at a five-year high. That is a positive sign for a strong December jobs report, which will be released next week.
A better job market could also drive more consumer spending, which accounts for 70 percent of economic activity.
A last-minute surge of online shopping helped boost overall holiday spending, according to MasterCard Advisors’ SpendingPulse report. Sales from Nov. 1 through Dec. 24 rose 3.5 percent compared with the previous year, the firm said last week.
— Associated Press
ALSO IN BUSINESS
● Target is getting hit with another lump of coal this holiday season. The nation’s second-largest discount retailer said Tuesday that an unidentified number of gift cards sold over the holidays were not properly activated. The Minneapolis chain says the number of cards affected was less than 0.1 percent of the total sold and that it will honor the affected cards. Holders of Target gift cards can check the balance by following instructions on the back of the card. Customers can bring faulty cards to any Target service desk or call 800-544-2943 for help. On Friday, Target backtracked and said that debit-card PINs were among the financial information stolen from millions of customers who shopped at the retailer in late November and early December.
● Apple has never worked with the National Security Agency and is unaware of efforts to target its smartphones, the company said in response to reports that the spy agency had developed a system to hack into and monitor iPhones. Germany’s Der Spiegel reported Sunday that a secretive unit of the NSA, which is under fire for the extent and depth of its spying programs around the world, makes specialized gear and software to infiltrate and monitor a plethora of computing devices, including mobile phones.
● Hewlett-Packard said it would cut 5,000 more jobs, bringing the total number of layoffs to 34,000, or 11 percent of its workforce. HP is striving to get back to growth through job cuts and focusing on businesses with longer-term potential such as enterprise services.
● Billionaire investor Steven A. Cohen’s SAC Capital Advisors is ending its life as a hedge fund with a 20.10 percent gain for 2013, marking one of the industry’s best returns even after SAC pleaded guilty to insider trading, a person familiar with the numbers told Reuters.●
— From news services
●Stock and bond markets are closed for New Year’s Day.