It appears home price appreciation is starting to significantly sag, having declined 0.2% on average in October compared to September, according to the S&P/Case-Shiller national home price index (HPI).
In addition, the index's 20-city and 10-city composites each posted a 0.1% decline. It was the first time this year that all three indexes posted month over month declines.
Although home prices appear to be headed down, eight cities did see prices rise, month over month, in October. San Francisco and Tampa, Fla., led all cities in with month over month increases of 0.8% each.
However, Chicago and Cleveland offset those gains by reporting decreases of 1.0% and 0.7%, respectively. Detroit and San Diego both reported flat monthly changes. Las Vegas saw its home prices decrease by 1.2% – the biggest month-over-month decline for any U.S. city in October.
Home prices are still up compared to October last year, but the report shows that the year-over-year gains are now slowly eroding. The 10-city and 20-city composites showed year-over-year gains of 4.4% and 4.5%, respectively – down from 4.7% and 4.8%, respectively, in September.
The national index, which covers all nine U.S. census divisions, recorded a 4.6% annual gain in October versus 4.8% in September.
David M. Blitzer, managing director and chairman of the index committee at S&P Dow Jones Indices, says although home price gains appear to have slowed for now, ‘we are seeing hints that prices could end 2014 on a strong note and accelerate into 2015.’
‘Two months ago, all 20 cities were experiencing weakening annual price increases, he explains in a statement. ‘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.
‘Most national economic statistics, other than those connected to housing, posted positive reports in November and early December,’ Blitzer adds. ‘Third quarter GDP was revised to 5% real growth at annual rates, and unemployment was at 5.8% as payrolls added over 300,000 jobs in November. Housing was somber: housing starts pulled back 1.6%, existing home sales were at 4.93 million, down 6.1%, and new home sales were 438,000, down 1.6%, all in November.’