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In this Thursday, Dec. 6, 2012, photo a new home is constructed in Pepper Pike, Ohio. US home construction surges 12.1 percent in December to end best year since 2008.
In this Thursday, Dec. 6, 2012, photo a new home is constructed in Pepper Pike, Ohio. US home construction surges 12.1 percent in December to end best year since 2008.
(Tony Dejak/AP)

Housing provides promising play in U.S. recovery

Turns out, rising borrowing costs aren’t much to fear when it comes to the U.S. housing market. The latest snapshot of home prices from the S&P/Case-Shiller 20-city index, released Tuesday morning, shows that prices rose 13.6 per cent in October over last year, based on a three-month average.

That’s impressive, and for two big reasons: one, prices have risen to a seven-year high after bottoming out as recently as 2012, which marks a sharp turnaround; and two, it means that the recovery in the housing market has shrugged off a big rise in borrowing costs after the yield on the 10-year U.S. Treasury bond surged to 3 per cent this year from a low of 1.6 per cent in May.