U.S. home prices rose 0.7% in September, compared to August, and were up 13.3% compared to September 2012, according to the S&P/Case-Shiller Home Price Index (HPI).
On a quarterly basis, U.S. home prices rose 3.2% in the third quarter, compared to the second quarter, and were up 11.2% compared to the third quarter of 2012.
David M. Blitzer, chairman of the Index Committee at S&P Dow Jones Indices, says the 11.2% year-over-year increase in home prices for the quarter was ‘the strongest figure since the boom peaked in 2006.’ He adds that the year-over-year growth for the HPI's 10-City and 20-City Composites was the highest seen since February 2006.
‘Twelve cities posted double-digit annual returns,’ Blitzer says. ‘Regionally, the West continues to lead, with Las Vegas gaining 29.1 percent, year-over-year, followed by San Francisco at 25.7 percent, Los Angeles at 21.8 percent and San Diego at 20.9 percent. San Francisco and Los Angeles showed their highest annual returns since March 2001 and December 2005. Although Chicago has not reached double-digit growth, the city recorded its highest year-over-year gain since November 2005.’
Blitzer says the recent strong price gains in the West ‘are sparking questions and concerns about the possibility of another bubble.’
‘However, the talk is focused on fear of a bubble, not a rush to join the party and buy,’ he says. ‘Moreover, other data suggest a market beginning to shift to slower growth rather than one about to accelerate. Existing-home sales weakened in the most recent report, home construction remains far below the boom levels of six or seven years ago and interest rates are expected to be higher a year from now.
‘Housing continues to emerge from the financial crisis: The proportion of homes in foreclosure is declining, and consumers' balance sheets are strengthening,’ Blitzer adds. ‘The longer run question is whether household formation continues to recover and if homeownership will return to the peak levels seen in 2004.’
On Monday, Lender Processing Services (LPS) released its HPI report, showing that U.S. home prices rose 0.2% in September compared to August and were up about 9% compared to September 2012.
The average price for a home in the U.S. for September was $232,000 – up from $231,000 in August, according to the LPS HPI.
To view the full S&P/Case-Shiller HPI report, click here.