In another sign of a turnaround in the long-battered real estate market, home prices rebounded in July to the same level as they were nine years ago.
According to the closely watched S&P/Case-Shiller national home prices index, which covers more than 80% of the housing market in the United States, the typical home price in July rose 1.6% compared to the previous month.
The index was up 1.2% compared to a year earlier, an improvement from the year-over-year change reported for June.
“The news on home prices in this report confirm recent good news about housing,” said David Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices. “Single-family housing starts are well ahead of last year’s pace, existing home sales are up, the inventory of homes for sale is down and foreclosure activity is slowing.”
The July reading matched levels of home prices last seen in summer 2003, when the market was marching toward its peak in 2006.
Earlier this month, the Federal Reserve announced it would buy $40 billion in mortgage bonds a month for the foreseeable future. This third round of asset purchases by the central bank, popularly known as QE3, is its effort to jump start the economy through even lower home loan rates.