Home price growth ticked down further in September, slipping below 5 percent as the once-hottest parts of the country reported diminishing returns.
The S&P/Case-Shiller Home Price Indices  grew 4.8 percent annually at the national level in September, according to the latest update from S&P Dow Jones Indices . September's growth rate compares to a gain of 5.1 percent in August.
The smaller 10- and 20-city composites also slowed, growing 4.8 percent and 4.9 percent, respectively, more than half a percentage point down from August for each index.
On a monthly basis, the National Index was down 0.1 percent from August, the first decline in 12 months. The 10- and 20-market indices also turned slightly downward.
After surging for more than a year, price growth started to come down late last year—a positive development in the eyes of many market analysts.
"[T]he slowdown is caused by fundamentals: more construction releases price pressures, while fewer foreclosures mean that homes are no longer experiencing massive appreciation relative to recession-era fire sales," said IHS  economists Patrick Newport and Stephanie Karol in a note. "Under these conditions, a slowdown in home price growth bears witness against the possibility of another housing bubble."
Regionally, the Northeast had the poorest showing in September, reporting its first negative monthly growth since December and its worst annual return since December 2012, owning primarily to weakness in Washington, D.C., and Boston.
The West and Southwest, two regions where prices have been especially strong throughout the recovery, are also seeing fading gains.
"The only region showing any sustained strength is the Southeast led by Florida; price gains are also evident in Atlanta and Charlotte," said David Blitzer, managing director and chairman of the Index Committee at S&P Dow Jones Indices.
With growth slowing down to a more sustainable pace, commentators hope to see a rise in U.S. homeownership and greater activity from first-time homebuyers who have been challenged by declining affordability levels. However, a closer look at price trends shows improvements have occurred mostly in the upper tier of homes, while the homes that lost the most value in the housing crash are still lagging.
"In most of the 20 cities covered by the index, people whose homes are in lower- or mid-range price tiers have only seen their homes appreciate back to 2001 levels. Many people who purchased their homes after 2001 cannot currently sell without taking a loss—and this problem is concentrated among the homeowners who can least afford to do so," Newport and Karol said.
They continued, "This means that higher-end homes are far more likely to be listed than lower-end homes. Since affordability is a major concern facing the housing recovery, this could create an obstacle for existing-home sales going forward."