WASHINGTON — Residential real-estate prices increased in the year ended August by the most in two years, a sign housing will continue to boost U.S. economic growth.
The S&P/Case-Shiller index of property values in 20 cities rose 2 percent from August 2011, the biggest year-to-year gain since July 2010, after climbing 1.2 percent the prior month, the group said Tuesday in New York. The median forecast of 25 economists in a Bloomberg survey projected a 1.9 percent gain.
The stabilization in values is rippling through the economy after the housing slump helped trigger the recession, supporting gains in consumer confidence and spending that are benefitting companies such as Lowe’s and Whirlpool.
Federal Reserve policymakers have promised to keep interest rates low through mid 2015 to spur growth and reduce unemployment.
“The housing recovery has had modest momentum,” said Anika Khan, a senior economist at Wells Fargo Securities in Charlotte, N.C., a subsidiary of the largest U.S. mortgage lender.
“We still are looking for housing improvement and think that trend will continue.”
Estimates in the Bloomberg survey ranged from gains of 1.5 percent to 3.1 percent. The Case-Shiller index is based on a three-month average, which means the August data were influenced by transactions in June and July.
U.S. home prices adjusted for seasonal variations increased 0.5 percent in August from the prior month, with 19 of 20 cities showing gains, Tuesday’s Case-Shiller report showed. Seattle was the exception, showing a 0.1 percent decline.