Home prices in 20 U.S. cities rose in April from a year earlier as sales got a boost from a tax credit aimed at reviving the industry that triggered the worst recession since the 1930s.
The S&P/Case-Shiller index of property values climbed 3.8% from April 2009, the biggest year-over-year gain since September 2006, the group said Tuesday.
The end of a government homebuyer incentive worth as much as $8,000, mounting foreclosures and unemployment near a 26-year high threaten to set real estate prices back following the stabilization that began earlier this year.
"It's just a transitory bounce reflecting the flurry of activity before the expiration of the homebuyer tax credit," said John Herrmann, senior fixed-income strategist at State Street Global Markets LLC in Boston. "As the tax credit is unwound and sales are plunging, the pricing environment is once again weakening."
The home-price index was forecast to rise 3.4% after a year-over-year increase of 2.3% for March, according to the median forecast of 26 economists surveyed by Bloomberg News.
Eleven of the 20 cities in the S&P/Case-Shiller index showed a year-over-year increase, led by an 18% gain in San Francisco. Las Vegas showed the biggest year-over-year decrease, with prices falling 8.5%.
Compared with the prior month, 18 of the 20 areas covered showed an increase on an unadjusted basis, led by a 2.4% gain in Washington and a 2.2% increase in San Francisco. Miami and New York were the only two cities showing a monthly decrease.