Home prices post strongest gains in 7 years
NEW YORK (CNNMoney) U.S. home prices posted their strongest gains since 2006, as the housing recovery continued to gain steam. Prices on the S&P/Case-Shiller national index rose 10.2% in the first quarter, according to the latest report.
That marked the fourth consecutive quarter of year-over-year gains, says David Blitzer, head of S&P's index division. The strong gains over the past year may be a bit of a statistical mirage, according to Robert Shiller, a Yale economist and co-founder of the index. Foreclosure sales are down, he said, and since foreclosures sell at a steep discount, that's boosted average home prices. Related: Best deals on real estate But eventually the proportion of foreclosure sales will stabilize, and that will make annual price gains less dramatic. There's another factor arguing against continued price gains, according to Shiller. Home prices are already at what he considers "normal" levels, adjusted for inflation. Even the steep housing downturn only took prices to where they would have been if they hadn't skyrocketed during the bubble.