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Home prices up for first time in 10 months

CNBC's Rick Santelli reports on the dip in the Consumer Confidence Index and the drop in new home sales, with CNBC's Diana Olick.

Single-family home prices rose for the first time in 10 months, in an encouraging sign the battered sector is starting to stabilize, a closely watched survey said on Tuesday.

The S&P/Case Shiller composite index of 20 metropolitan areas gained 0.2 percent in February on a seasonally adjusted basis, matching economists' forecasts.

It was the first time prices have gained since April 2011. That gain was itself an anomaly in a string of declines stretching back to May 2010.

But on a non-seasonally adjusted basis, the 20-city index was down 0.8 percent at 134.20, the lowest since October 2002.

Is this good news or bad news? It depends on who you ask.

Yale economics professor Robert Shiller, the co-creator of the Standard & Poor's/Case-Shiller home price index, believes the housing market is likely to remain weak and may take a generation or more to rebound.

Shiller, the co-creator of the Standard & Poor's/Case-Shiller home price index, told Reuters Insider a weak labor market, high gas prices and a general sense of unease among consumers was outweighing low mortgage rates and would likely keep a lid on prices for the foreseeable future.

"I worry that we might not see a really major turnaround in our lifetimes," Shiller said.

He said suburban areas in particular might endure further price declines as high gas prices increase demand for "walkable cities." 

David Blitzer, chairman of the index committee at Standard & Poor's, cautioned that while there were some pieces of good news in the report, some areas still continued to decline.

"Looking forward, we think homes sales will continue to trend upward, which ultimately will result in a slower rate of home value depreciation," said Stan Humphries, chief economist at Zillow.

"But any housing recovery will be dependent on job growth. Continued progress in this area is essential to keeping the housing recovery, such as it is, on track."

Seven of the cities saw prices drop on a seasonally adjusted basis, while prices in two cities were unchanged. On an unadjusted basis, 16 of the areas slumped further.

Prices in the 20 cities fell 3.5 percent year over year, moderating from the previous month's decline of 3.8 percent.

Reuters contributed to this report.