Single-Family Home Prices Increased 9.3% in February

WASHINGTON (Reuters) — Home prices rose in February at their fastest rate in almost seven years, another sign the housing market recovery will help counter the drag on the economy from government belt-tightening.

The biggest gains in home prices were in some of the cities that were hardest hit by the crisis, including Phoenix, Atlanta and Las Vegas. Above, homes under construction in Atlanta in March.

The S&P/Case Shiller index of 20 metropolitan areas released on Tuesday showed single-family home prices rose 9.3 percent in February from a year earlier.

The data reinforces the view that rising home prices could make Americans feel better about spending this year, helping counter a blow to economic growth from tax increases and government spending cuts.

“This will be a powerful positive fundamental, not only for housing, but presumably helpful for consumer spending as well,” said Stephen Stanley an economist at Pierpont Securities in Stamford, Conn.

Another report showed consumer confidence rebounded in April as Americans felt better about the outlook for the economy and their income prospects. The Conference Board, a private industry group, said its index of consumer attitudes rose to 68.1 from a revised 61.9 the previous month. Economists polled by Reuters had expected a reading of 60.8.

Still, there appears to be a growing risk that weakness in the labor market and broader economy could dial down the housing recovery’s strength. Hiring slowed drastically in March and economic growth was lackluster in the first quarter, raising fear that the economy could struggle to cope with Washington’s austerity drive.

Business activity in the Midwest unexpectedly contracted in April to its lowest level since September 2009 as a gauge of employment declined, another report showed.

The Institute for Supply Management-Chicago business barometer fell to 49, below the 50 mark that denotes contraction and falling short of economists’ expectations for 52.5.

Inventories Dropped in February, Even as Sales Rose

Let’s install webcams in slaughterhouses so we can see how we get our meat.

A look back at Margaret Thatcher’s mutual admiration society with Mikhail Gorbachev in the final years of the Cold War.

European New-Car Sales Down 10.2 Percent in February

MILAN — Europe’s new car market shrank a further 10.2 percent in February, according to figures from the Association of European Car Manufacturers on Tuesday, the lowest since its records began in 1990.

Ford, General Motors and Fiat were the worst performers, as European car registrations fell to 829,359 vehicles after hitting a 17-year low in January.

Car makers in Europe are still reeling from a terrible 2012, when annual car sales volumes in the 27-nation European Union fell 8.2 percent to 12.05 million vehicles. In the 17-nation euro zone, sales dropped 11.3 percent to just under 9 million, according to Reuters calculations.

This year is shaping up to be another tough slog for mass-market car makers, as consumers in recessionary European economies postpone new car purchases.

For 2013, the market forecaster LMC Automotive recently estimated a 3.1 percent drop in West European sales, to 11.4 million vehicles, compared with levels of around 12.8 million in 2011 and 13 million in 2010.

At the European market leader Volkswagen, sales of the core VW brand fell nearly 10 percent, and sales of its luxury brand, Audi, fell 3.8 percent.

The South Korean brands Hyundai and Kia, usually a bright spot, gained 1.4 percent and dropped 1.1 percent, respectively. The duo have made a name for themselves with attractively designed, affordable cars that enjoy long warranties.

Another bright spot was Britain, where sales rose 7.9 percent.

Housing Starts Rose in February

WASHINGTON — American builders started more houses and apartments in February than a month earlier, the Commerce Department reported on Tuesday, pointing to a housing recovery that was gaining strength.

The government said builders broke ground on homes at a seasonally adjusted annual rate of 917,000, an increase from 910,000 starts in January. February’s performance was the second-fastest pace since June 2008, behind December’s pace of 982,000.

Single-family home construction increased to an annual rate of 618,000, the strongest level in four and a half years. Apartment construction also ticked up, to 285,000.

The gains are likely to grow even faster in the coming months. Building permits, a sign of future construction, increased 4.6 percent, to 946,000, last month. That was also the most since June 2008, just a few months into the Great Recession.

The American housing market is recovering after stagnating for roughly five years. Steady job gains and near-record-low mortgage rates have encouraged more people to buy.

Still, the supply of available homes for sale remains low. That has helped push up home prices, which rose nearly 10 percent in January compared with the period a year earlier, according to CoreLogic. The price gain was the biggest increase in nearly seven years.

The number of previously occupied homes for sale has fallen to its lowest level in 13 years. And the pace of foreclosures, while still rising in some states, has slowed sharply on a national basis. That means fewer low-priced foreclosed homes are being dumped on the market.

Those trends, and the likelihood of further price gains, have led builders to step up construction. Last year, builders broke ground on the most homes in four years.

Homebuilders have become much more confident in the last year. But in March, a measure of homebuilder confidence fell for the second consecutive month over concerns that demand for new homes was exceeding supplies of land, building materials and workers. In the short term, that could slow sales.

But the survey noted that the outlook for sales over the next six months rose to its highest level in more than six years.

Though new homes represent only a fraction of the housing market, they have an outsize effect on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in tax revenue, according to statistics from the homebuilders.

Auto Sales for February 2013 Jumped 3.7%

Automakers sold 1.19 million vehicles during the month, a 3.7 percent increase over the period a year earlier, according to the research firm Autodata.

The seasonally adjusted annual sales rate, a closely watched market indicator, totaled about 15.4 million vehicles. The rate bodes well for the industry, as automakers increase production to meet demand for their new products.

The February results were a bit lower than anticipated, analysts said, attributing part of the slowdown during the latter part of the month to rising gas prices and fluctuations in the stock market.

“Whenever there is uncertainty in the stock market, the car market doesn’t like it,” said Jesse Toprak, an analyst with the automotive research site TrueCar.com. “But despite lower stocks and higher gas prices, consumers continued to buy.”

The two largest Detroit car companies, General Motors and Ford Motor, posted some of the best results among all the major automakers.

G.M. said it sold 224,000 vehicles in February, a 7.2 percent increase from the same month in 2012.

All of G.M.’s domestic brands — Chevrolet, Cadillac, GMC and Buick — had higher year-over-year sales.

Cadillac led the way with a 20 percent gain, primarily because of healthy sales of the new ATS compact sedan.

G.M. also reported increases in sales of its newest small cars, like the Buick Verano and the Chevrolet Spark. But its most prominent gains were in pickup trucks. The company said sales of the Chevrolet Silverado pickup rose 29 percent, and the GMC Sierra increased 25 percent.

Executives attributed the performance to a surge in housing starts and the need for construction companies to replace older pickups.

“A significant tail wind for our industry is new home construction, which is creating jobs and fueling the demand for pickups,” said Kurt McNeil, G.M.’s vice president for United States sales operations.

Ford said it sold 195,000 vehicles during the month, which represents a 9.3 percent gain from a year ago.

Much of Ford’s gains came from sales of sport utility vehicles like the Escape and Explorer. The company’s redesigned midsize sedan, the Fusion, also had a good month, with a 28 percent improvement over last year.

And like G.M., Ford also benefited from higher demand for pickups. Ford said that it sold 54,000 F-series trucks during the month, a 15.3 percent increase from February 2012.

But Ford is still struggling to invigorate its lagging Lincoln luxury brand, which dropped 29 percent in sales.

“Lincoln’s performance was dismal,” said Michelle Krebs, an analyst with the research site Edmunds.com.

The growth rate at Chrysler, the smallest of the Detroit automakers, slowed somewhat after several months of recording double-digit increases.

The company said that it sold 139,000 vehicles in February, a 4.1 percent improvement over a year earlier. That is a smaller increase than Chrysler has reported in previous months.

“In spite of a cautious ramp up of some of our most popular products, which limited inventory last month, we still managed to record our strongest February in five years,” said Reid Bigland, head of United States sales for Chrysler.

Chrysler’s best performers during the month were passenger cars like the new Dodge Dart.

Sales of its Ram pickup increased 3 percent, while sales of its Jeep sport utility vehicles dropped 16 percent.

The big Japanese automakers had mixed results, as they continued their methodical comeback from inventory disruptions because of the earthquake and tsunami in Japan two years ago.

Toyota, the largest Japanese car manufacturer, said it sold 166,000 vehicles in February, about 4.3 percent more than a year earlier.

Usually, Toyota’s passenger cars are its hottest sellers and its trucks trail the market. But in February the roles were reversed, as its car sales dropped about 3 percent and its sport utility vehicles and truck sales increased by 16 percent.

Honda reported a 2 percent drop in sales, to 107,000 vehicles. The company said heavy winter storms in the Northeast, traditionally one of its strongest regions, contributed to the decline.

And Nissan said its February sales slid about 6.6 percent, to 99,000 vehicles.

February was a relatively good month for Volkswagen, the big German automaker, which is rapidly expanding its United States operations.

V.W. said it sold 42,000 vehicles during the month, an 8.4 percent increase from the previous year. The results were fueled primarily by strong sales of its Audi luxury-brand vehicles, which rose about 28 percent.