The SP/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.

Article source: http://www.nytimes.com/2013/05/01/business/economy/single-family-home-prices-increased-9-3-in-february.html?partner=rss&emc=rss