This past November showed 14 out of 20 metro areas that showed improvements from the previous month regarding an increase in home prices for the sixth straight month.
Released today, The Standard & Poor's/Case-Shiller home price index showed an increase of 0.2 percent to a seasonally adjusted reading of 145.49 and based on these new numbers the index is now up 3.4 percent from the bottom that was reached in May 2009. The index is still 30 percent below its peak in May 2006.
San Francisco posted one of the highest month-to-month gains on a seasonally adjusted basis.
Powered by a federal tax credit for first-time homebuyers the recent price gains were a direct result of those who rushed to purchase a home before the original November 30th deadline and before the extension that was approved by Congress as well as expanding the program to include a tax credit for current homeowners.
Rising home prices are important to the economic recovery because they make homeowners feel more confident and wealthier which will make them more likely to spend more money. An added bonus to better home prices is that they also help millions of homeowners who owe more to the banks than their homes are worth and may begin to reverse the onslaught of homes being underwater.