Rate of Appreciation Slows but Unseasonal Gains Remain Elevated

Home prices continued to advance in September, bringing third-quarter growth to 3.2 percent, according to the S&P/Case-Shiller Home Price Indices released Tuesday.

Both the 10- and 20-city composite indices rose 0.7 percent month-over-month and 13.3 percent year-over-year in September. Since bottoming out in March 2012, the 10- and 20-city composites have recovered 22.9 percent and 23.6 percent, respectively; compared to their June/July 2006 peaks, both indices are down about 20 percent.

Price gains decelerated on a monthly basis in 19 cities in September. Las Vegas and Tampa saw the greatest slowdown, with growth rates dropping 1.6 percentage

points compared to August. Miami was the only city where growth kept its pace at 0.8 percent.

Detroit was the strongest city in September, seeing a monthly price increase of 1.5 percent—though it remains the only market still below its January 2000 level. Meanwhile, Charlotte was the weakest, reporting a decline of 0.2 percent—the first drop for that city since November 2012.

Looking at annual changes, all 20 cities reported growth, and 13 fared better than they did in August. Cleveland posted the strongest acceleration (moving from 3.7 percent annual appreciation in August to 5.0 percent in September), though it remains the second-worst performing city, beating only New York.

Las Vegas, Los Angeles, San Diego, and San Francisco had the strongest year-over-year price improvements, each posting gains of over 20 percent. Las Vegas topped the rest with a year-over-year price increase of 29.1 percent.

David M. Blitzer, chairman of the Index Committee at S&P Dow Jones Indices, said September’s numbers are proof that housing is making its way out of the rubble of the financial crisis.

“The longer run question is whether household formation continues to recover and if homeownership will return to the peak levels seen in 2004,” he said.


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