Asking Home Prices Slow in Hottest Markets

""Trulia"":http://www.trulia.com/ is the latest company to report a monthly slowdown in home prices--and trends indicate yearly gains may soon cool as well.

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The company released Thursday its Price and Rent monitors for the month of September. The indices are based on for-sale homes and rentals listed on Trulia's website.

Nationally, Trulia reported asking home prices were up 3.0 percent quarter-over-quarter in September, the smallest quarterly change since February. At the metro level, 89 of the 100 largest markets experienced quarter-over-quarter price increases--down from 97 in June--and many of those metros reported smaller quarterly gains than before.

""Asking home prices give us the first look at where home sale prices are headed, and they point to a slowdown,"" said Trulia chief economist Jed Kolko. ""After rising rapidly in the first half of 2013, asking prices in two thirds of the largest metros are cooling. In fact, asking prices are falling--not just rising more slowly--in 11 of the 100 largest metros, the most markets to see prices slip in six months.""

The trend was most apparent in California, home to Sacramento, Oakland, Orange County, and Los Angeles--all markets that saw asking price gains slow by 2 percent or more (though prices were up in those metros by at least 20 percent year-over-year).

Nationally, asking prices were up in September 2.0 percent month-over-month and 11.5 percent year-over-year. Trulia says those yearly improvements will likely shrink in the coming months as mortgage rates rise, inventory expands, and investor activity fades--and then there's the impact of what's currently happening (or not happening) in Washington.

""A prolonged government shutdown could hurt housing demand in Washington D.C. and other metros that depend heavily on federal money. Worse, in the unlikely event that hitting the debt ceiling later this month causes the government to stop paying its bills or--worst of all--default, the resulting financial panic could send the economy and the housing market into a tailspin,"" Kolko said.