Home prices fell in the month of February, but rose compared to a year ago for the first time in more than three years, in the latest sign that the housing market is slowly recovering.
In other data on Tuesday, U.S. consumer confidence rose in April to the highest level since the collapse of investment bank Lehman Brothers in September 2008, driven by growing optimism about the labor market, according to a private sector report released on Tuesday.
U.S. house prices have benefited recently from a federal homebuyer tax credit that expires on April 30, but a glut of mortgage foreclosure sales continue to weigh on the market, Standard & Poor's said on Tuesday.
The S&P/Case-Shiller 20-city composite price index fell 0.9 percent on an unadjusted basis in February, worse than a 0.3 percent decline estimated in a Reuters survey. Seasonally adjusted, prices declined by 0.1 percent, as expected, after a string of eight straight monthly increases.
S&P's 10-city and 20-city index increased year-on-year for the first time since December 2006, rising 1.4 percent and 0.6 percent, respectively, compared to February 2009.
But the 20-city index gain was half of the rise forecast in a Reuters poll.
We are really still in what we consider a stabilization period, said Tim Ghriskey, chief investment officer at Solaris Asset Management in Bedford Hills, New York.
From the peak in mid-2006 through February 2007, U.S. home prices are still down more than 30 percent on average nationwide, S&P noted.
While prices slid in February, mortgage rates stayed low near 5.0 percent and the number of home sales leaped in March as buyers rushed to take advantage of the soon expiring tax credit of up to $8,000. Sales and prices through the spring months will be closely monitored to see if the momentum continues once the tax incentive ends.
While the year-over-year data continued to improve for 18 of the 20 Metropolitan Statistical Areas and the two Composites, this simply confirms that the pace of decline is less severe than a year ago, said David M. Blitzer, Chairman of S&P's Index Committee, in a statement. It is too early to say that the housing market is recovering.
US CONSUMER CONFIDENCE JUMPS IN APRIL
U.S. consumer confidence rose in April to the highest level since September 2008, according to the U.S. Conference Board.,
The Board's index of consumer attitudes rose for the second straight month in April to 57.9 from a downwardly revised 52.3 in March.
The median of forecasts from analysts polled by Reuters was for a reading of 53.5 for April.
The expectations index increased to 77.4 in April, the strongest showing since October 2007, from a revised 70.4 in March.
The present situation index advanced to 28.6, the highest since May 2009, from a revised 25.2.
Consumers' labor market assessment improved. The jobs hard to get index fell to 45.0 percent from 46.3 percent, while the jobs plentiful index increased to 4.8 percent from 4.0 percent.
This was a solid overall report, said Tom Porcelli, U.S. market economist at RBC Capital Markets in New York. There was strength in both the present situation and the expectations component. The labor differential also improved. We find that to be a pretty useful indicator for what's happening with an employment perspective. We are definitely moving in the right direction, he said.
U.S. stocks were slightly lower after the data with the SP500 index off 0.26 pct 1208.89, while U.S. Treasury prices were slightly higher, and the U.S. dollar was firmer.
(Reporting by Lynn Adler)