US home prices rise in October from previous year

The S&P/Case-Shiller index covers roughly half of U.S. homes. It measures prices compared with those in January 2000 and creates a three-month moving average. The October figures are the latest available.

Solid gains in home prices have helped drive a modest recovery in the housing market. Rising prices encourage more potential buyers to come off the sidelines and purchase homes. And more people may put their homes on the market as they gain confidence that they can sell at a good price.

Higher home prices can also make homeowners feel wealthier and more likely to spend more. Consumer spending accounts for about 70 percent of the U.S. economy.

Steady job gains and record-low mortgage rates have also helped propel the housing recovery. And the low supply of houses for sale is encouraging builders to start work on more homes. That should lead to more construction jobs.

The pace of home construction slipped in November but was still nearly 22 percent higher than a year earlier. Builders are on track this year to start work on the most homes in four years.

Builder confidence rose in December for a seventh straight month to the highest level in more than 6½ years, according to a survey released last week by the National Association of Home Builders/Wells Fargo.