Home Price Gains in 20 U.S. Cities Show Signs of Stabilizing

(Bloomberg) --

Home prices in 20 U.S. cities rose more than forecast in September from a year earlier, indicating property values are stabilizing as housing demand picks up. It marked the first acceleration in annual prices since 2018.

The S&P CoreLogic Case-Shiller index of property values increased 2.1% from September 2018, higher than the median estimate of 2% in a Bloomberg survey of economists, data showed Tuesday. Prices rose 0.4% from the previous month. A separate report from the Federal Housing Finance Agency showed home prices advanced 0.6% in September from a month earlier, the most since January.

Key Insights

• Home prices rose in September as lower mortgage rates and a solid labor market generated buyer interest in a market where supply remains lean. At the same time, price growth has slowed since early 2018, when year-over-year increases exceeded 6% and made homes less affordable.
• All 20 cities in the index, with the exception of San Francisco, showed annual gains, led by a 6% surge in Phoenix.
• Other data point to a healthier housing market. Sales of existing properties that make up the vast majority of transactions increased in October for the third time in four months. A report later this morning is projected to show a modest increase in new-home sales.
• Economists estimated a 0.3% gain in home prices from the prior month.

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• Prices rose from the prior month in 17 cities, led by a 0.8% increase in Seattle and a 0.7% gain in Los Angeles. Home prices fell in San Francisco, Chicago and Boston.
• The FHFA’s data, derived from conforming mortgages, also showed that prices in the third quarter increased 1.11% from the previous three months, the smallest advance since the second quarter of 2014. Compared with the third quarter of last year, prices rose 4.9%, the smallest gain since the first quarter of 2015.

--With assistance from Kristy Scheuble.

To contact the reporter on this story: Katia Dmitrieva in Washington at edmitrieva1@bloomberg.net

To contact the editors responsible for this story: Scott Lanman at slanman@bloomberg.net, Vince Golle, Brendan Murray

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