Home prices in the U.S. increased at a slower pace in October than in September, although eight cities experienced growth at a faster rate, according to the latest S&P/Case-Shiller Home Price Index released by S&P/Dow Jones Indices on Tuesday.
The rate of home price growth eased for both the 10- and 20-city composite indices year-over-year in October compared to September. The 10-city composite gained 4.4 percent year-over-year in October, compared to 4.7 in September, while the 20-city composite experienced a 4.5 percent year-over-year gain in October – down from 4.8 percent in September. The national index, which covers all nine U.S. census divisions, saw a year-over-year gain of 4.6 percent in October compared to 4.8 percent in September.
Eight cities out of the 20-city composite, however, scored higher year-over-year gains than the average for the composite, led by Miami (9.5 percent) and San Francisco (9.1 percent). Las Vegas had the lowest annual return in October with a decline of 1.2 percent.
Both composite indices experienced slight month-over-month declines in home prices (0.1 percent) from September to October for the second straight month while the national index saw a decrease of 0.2 percent. The two cities with the largest month-over-month increases in October were San Francisco and Tampa at 0.8 percent each while Chicago and Cleveland had the largest declines for the month at 1.0 percent and 0.7 percent, respectively.
Ten cities out of the 20-city composite reported lower month-over-month percentages, while eight cities reported increases from September to October. Two cities, Detroit and San Diego, reported no month-over-month change. The city with the largest month-over-month increase in home prices was San Francisco (0.8 percent).
"After a long period when home prices rose, but at a slower pace with each passing month, we are seeing hints that prices could end 2014 on a strong note and accelerate into 2015," said David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices. "Two months ago, all 20 cities were experiencing weakening annual price increases. Last month, 18 experienced weakness. This time, 12 cities had weaker annual price growth, but eight saw the pace of price gains pick up. Seasonally adjusted, all 20 cities had higher prices than a month ago."
Blitzer noted that while most economic reports for November and early December have generally been positive, most housing industry statistics for that period have not been.
"Third quarter GDP was revised to 5 percent real growth at annual rates, and unemployment was at 5.8 percent as payrolls added over 300,000 jobs in November," Blitzer said. "Housing was somber: housing starts pulled back 1.6 percent, existing home sales were at 4.93 million, down 6.1 percent, and new home sales were 438,000, down 1.6 percent, all in November."