The Bigger Picture in S&P’s Home Price Data

Following ""S&P's"":http://us.spindices.com/ calculation of a 0.1 percent decrease in prices in November, according to the Case-Shiller 20-city composite, analysis on home price data remained positive. ""[A]fter accounting for the normal slowdown in the housing market over the winter months, this actually looks like another 0.6 percent [month-over-month] gain,"" stated ""Capital Economics"":http://www.capitaleconomics.com/ Tuesday.

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Similarly ""IHS Global Insight's"":http://www.ihs.com/products/global-insight/index.aspx Stephanie Karol noted both Case-Shiller indices, when seasonally adjusted, posted increases for the 10th consecutive month. These increases ""are making a difference,"" she said.

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Karol pointed out higher prices are leading to increased household wealth; rising property taxes, which are benefiting local governments; and renewed opportunities for home builders.

Household wealth rose by more than $1 trillion over the first three quarters of last year, Karol stated, citing information from the Federal Reserve. Over the same period, more than 1.4 million homeowners rose above water on their mortgages, according to data from CoreLogic.

Both Capital Economics and IHS anticipate continued price increases throughout this year.

IHS attributes the recent increases to three factors: job growth, diminishing inventories, and low interest rates. ""These three drivers will keep home prices moving up in 2013,"" Karol said.

While Phoenix outpaced all other cities in Case-Shiller's indices with a 22.8 percent price gain year-over-year in November, Capital Economics says these types of drastic gains ""are unlikely to be sustainable.""

The firm suggests prices will continue to rise but at milder rates.

IHS pointed New York's price decline as an ""eyesore"" in the recent Case-Shiller Indices. Foreclosures are playing a role in New York's current market woes.