The rebound in U.S. home prices may be about to accelerate, according to Jonathan Basile, an economist at Credit Suisse in New York.
The CHART OF THE DAY shows year-to-year changes in the S&P/Case-Shiller 20-city home-price index compared with the Labor Department’s measure tracking prices paid to real estate agents and brokers from today’s report on producer prices.
The wholesale real-estate costs climbed 9.1 percent in the 12 months ended in April, the biggest year-to-year pop since 2005. The latest data available show the Case-Shiller index climbed 9.3 percent in February from the same month in 2012, making it the biggest gain since mid-2006.
If the correlation with the PPI real-estate index holds, then the Case-Shiller index may approach its 2005 year-to-year gains of almost 17 percent in coming months, according to Basile.
“Positive news on house prices should continue,” Basile said in research note.
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