Home prices in February posted their first annual increase in more than three years, though it's too early to say the housing market is recovering.
Despite the 0.6 percent increase on a non-seasonally adjusted basis, 11 of the 20 cities in the Standard & Poor's/Case-Shiller home price index showed declines.
The last time prices rose on a year-over-year basis was December 2006. But economists polled by Thomson Reuters had predicted prices to rise 1.2 percent in February.
Home prices are up more than 3 percent from the bottom in May 2009, but still are 30 percent below the May 2006 peak.
Las Vegas saw the largest annual drop at almost 15 percent. San Francisco posted the biggest gain, at about 12 percent.
"These data point to a risk that home prices could decline futher before experiencing any sustained gains," David Blitzer, chairman of the S&P index committee, said in a statement.
A recovery in prices is considered necessary to boost consumer optimism and help revive the economy. A home is the largest and most important financial asset for most Americans, so as values climb, homeowners feel wealthier and more comfortable spending.
For homeowners who owe more on their mortgages than their properties are worth, rising prices rebuild equity.
Earlier this month, Standard & Poor's recommended clients not to use its seasonally adjusted figures because they may be misleading.
Normally, seasonal adjustments are applied to data that can be affected by the time of the year, or the seasons, like the traditional spring home shopping months. But the three-year surge in foreclosures has magnified the seasonal factors in S&P's computer model, making them less reliable.
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