FNC's Residential Price Index dropped 0.3 percent in September, despite strong home sales and continued improvement in the labor market.
It was the first time in 30 months that values did not rise, though home prices in the third quarter overall were up 1.8 percent over the second quarter.
The largest drop in home prices occurred in Los Angeles and San Francisco, where values were down 2.8 and 2.6 percent, respectively. This is the second consecutive month that Bay Area home prices fell on the FNC index—prices there had dropped 2.1 percent in August.
Other major cities on the downhill slide included New York, Tampa, Cleveland, Columbus, and Portland.
Prices were up or relatively flat in 17 of the 30 cities tracked by the FNC index, down from 22 cities in August and 26 in July. The average price gain among the 17 up-markets was 0.7 percent compared to 1.2 percent in August.
Homes in Atlanta, Minneapolis, and Dallas, however, still showed strong price increases. Atlanta home prices were up 2.5 percent from August, while those in Minneapolis and Dallas were up more than a full percent each. Houston also was up, nearly a full percent, but San Antonio, one of the fastest-growing cities in Texas, recorded a 0.2 percent drop in home prices in September.
FNC's latest numbers jibe with some recent reports concerning the state of home sales across the country. Last month, RE/MAX reported that September home sales  nationally were down more than 10 percent from August, though still up more than 5 percent from a year ago.
Whether such events indicate an ongoing trend in the American market is unknown, but the FNC report is the latest indication among many that the U.S. housing market remains strong, despite (or perhaps because of) a slow cooling in home prices.