Home prices rose in August, strongest gain since 2006

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A home for sale in the Wicker Park neighborhood of Chicago on October 28, 2013. The latest survey shows home prices rose in August in the strongest increase since February 2006.

Single-family home prices rose in August and also posted their strongest annual gain in more than seven years, a closely watched survey showed on Tuesday.

The S&P/Case Shiller composite index of 20 metropolitan areas rose 0.9 percent on a seasonally adjusted basis, beating economists' expectation of an 0.6 percent gain. Prices rose 0.6 percent in July.

On a non-adjusted basis, prices rose 1.3 percent.

Compared to a year earlier, prices were up 12.8 percent, beating economists' expectations of 12.5 percent and marking the strongest gain since February 2006, when the increase was 13.8 percent.

The August price gains came despite a rise that month in 30-year mortgage rates that slowed mortgage applications and refinancing activity.

The report suggested the housing sector continued to recover despite those headwinds. Home prices have been rising nationally since early 2012 and economists have singled out housing as one of the bright spots of the U.S. recovery.

Prices in all 20 cities rose on a non-seasonally adjusted yearly basis, led by a 29.2 percent gain in Las Vegas and followed by a 25.4 percent increase in San Francisco.

Copyright 2013 Thomson Reuters.