UPDATE 1-US Jan home prices rise, close to annual gain-S&P

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By Lynn Adler

NEW YORK, March 30 (BestGrowthStock) – Prices of U.S. single-family
homes rose in January for the eighth straight month and the
annual rate moved the closest it has been to an increase in
three years, Standard & Poor’s/Case Shiller home price indexes
showed on Tuesday.

The S&P/Case Shiller composite index of 20 metropolitan
areas unexpectedly rose by 0.3 percent, seasonally adjusted,
matching the December increase.

On an unadjusted basis, prices declined 0.4 percent in
January. S&P has said that foreclosures can skew the seasonal
adjustments.

A 0.3 percent drop for the adjusted and a 0.2 percent
decline for the unadjusted index were the median forecasts from
Reuters surveys.

“Whether there is housing market stability remains to be
seen, without government incentives,” said Pierre Ellis, senior
global economist at Decision Economics. “Healing is happening,
but it’s happening very slowly.”

Some key government supports will soon end, including home
buyer tax credits and massive Federal Reserve purchases of
mortgage-related debt aimed at keeping home borrowing costs
low.
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Graphic on U.S. home prices: http://link.reuters.com/tez75j ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

Thirty-year mortgage rates have averaged around 5 percent
in both January and in February, according to home funding
company Freddie Mac (FRE.N: ), which forecasts a rise to 5.60
percent in the fourth quarter.

On an annual basis, S&P’s 20-city price index fell 0.7
percent while the 10-city index was unchanged. The annual rates
for the two measures have not been as close to positive since
January 2007.

“While we continue to see improvements in the
year-over-year data for all 20 cities, the rebound in housing
prices seen last fall is fading,” David M. Blitzer, chairman of
the Index Committee at S&P, said of the mixed report.

Home foreclosures and a large shadow inventory of unsold
homes still loom over the fragile housing market, he said.

“We are in a seasonally weak part of the year, but given
the S&P/Case-Shiller home price data reported today, we can’t
say we’re out of the woods yet.”

Fewer cities experienced month-to-month gains in January
than in December 2009, on both a seasonally adjusted and
unadjusted basis. he noted.

From peak prices in mid-2006 through January, the 10-city
and 20-city price indexes have fallen by about 30 percent.

Stock Market

(Additional reporting by Richard Leong; Editing by Padraic
Cassidy)

UPDATE 1-US Jan home prices rise, close to annual gain-S&P