NEW YORK, USA – US home prices rose for the fifth month in a row in October, but the recovery continues to be uneven with only 11 of the 20 metro areas tracked showing gains.

The Standard & Poor’s/Case-Shiller home price index released yesterday edged up 0.4 per cent to a seasonally adjusted reading of 145.36 in October from September. Without adjusting for seasonal factors the index was flat from September.

The index was off 7.3 per cent from October last year, nearly matching expectations of economists surveyed by Thomson Reuters. Many economists, however, are predicting a double dip in prices this winter as foreclosures increase and government support wanes.

“I’d be very surprised if we don’t go below the lows we hit this year,” said Dean Baker, co-director of the Centre for Economic and Policy Research, a left-leaning Washington think tank. “We still have a very glutted housing market.”

The index is now up 3.4 per cent from its bottom in May, but still almost 30 per cent below its peak in April 2006.

There are also wide variations from city to city. Prices have climbed for at least six months in a row in Denver, Washington, Minneapolis and San Francisco. But in Chicago and Tampa, Florida, prices are down by more than one per cent from September. And there’s no sign of a bottom in Las Vegas, where prices have tumbled by more than 56 per cent from their peak in April 2006.

Home prices play a key role in the economy. Homeowners feel wealthier when property values rise and are more likely to spend money. Rising prices also help millions of homeowners who owe more to the banks than their houses are worth.

The positive trend in home prices and a better employment outlook helped raise the Consumer Confidence Index to 52.9 in December, up from a revised 50.6 the month before, the Conference Board reported yesterday. While far below a 90 reading that would signify a solid economy, consumers’ outlook on jobs over the next six months reached its highest level in two years.

Home price gains since the summer reflect the rush of homebuyers trying to close their deals before the original expiration date of a federal tax deadline was extended last month to April 30.

Besides a credit of up to US$8,000 for first-time buyers, Congress expanded the programme to include homeowners who have lived in their current properties for at least five years. They can now claim a tax credit of up to US$6,500 if they relocate.

The Federal Reserve is also buying up US$1.25 trillion in mortgage-backed securities to help keep interest rates at historic lows.