May 29, 2012 at 9:21 AM ET
U.S. single-family home prices edged higher in March, the second month of gains in a row, adding to signs the housing market is stabilizing, a closely watched survey said on Tuesday.
The S&P/Case Shiller composite index of 20 metropolitan areas gained 0.1 percent in March on a seasonally adjusted basis, falling shy of economists' forecasts for a gain of 0.2 percent.
On an unadjusted basis, the index was unchanged. Prices in the 20 cities were down 2.6 percent year over year, improving from the 3.5 percent yearly decline seen last month.
Still, the major indexes ended the first quarter at new post-crisis lows, the report said. For the first quarter, prices were down 2 percent, compared to a 3.9 percent decline in the last three months of 2011.
Tuesday's data was another piece of evidence recently that the housing market is making a bumpy revival. The median price for a new home rose 4.9 percent in April, year over year, while sales of existing homes rose 10 percent last month versus April 2011.
"In my mind there is no question that housing has bottomed, in terms of home sales, home construction and home prices but the recovery is still going to be very modest or very sluggish," said Mark Vitner, senior economist for Wells Fargo Securities.
Housing has a long way to go, though. Nearly 16 million homeowners owed more on their mortgages than their home was worth in the first quarter, or nearly one-third of U.S. homeowners with mortgages.
"There are still so many unanswered questions in front of us, such as what has happened to attitudes toward home ownership. We know there has been some change to that. Also we don't know what is going to happen with Fannie Mae and Freddie Mac, what is the government's role in mortgage financing going to be? We are not going to be able to settle that until after the election," Vitner said.
Reuters contributed to this report.