WASHINGTON and NEW YORK (11/27/13)--Two prominent indexes confirmed Tuesday that home prices have been accelerating this fall, but the upward trend is showing signs of abatement.
The seasonally adjusted Standard &Poor's/Case Shiller 20-city Home Price Index and the Federal Housing Finance Agency Purchase-Only House Price Index increased in September by 1% and 0.3% respectively.
The S&P/Case Shiller Index over the entire third quarter grew by 13.3% on an annual basis, with the strongest gains out west--in Las Vegas (29.1%), San Francisco (25.7%), Los Angeles (21.7%) and San Diego (20.9%). Weakest gains were recorded in New York (4.3%), Washington (7%) and Boston (7.5%). The FHFA index also showed annual nationwide growth in September, with its purchase-only index increasing by 8.5% since September 2012 (Economy.com Nov. 26).
Both the FHFA and S&P/Case Shiller indicate that housing prices have almost recovered from the recession. The former's purchase-only index last reached its September 2013 level, 206.4, in April 2005 before peaking in 2006. A nationwide measure recorded by the latter showed that housing prices climbed by 11.2% on an annual basis in the third quarter--the highest increase since the first quarter of 2006.
Similarly, both the regulator and the research firm showed that prices started to cool as the quarter wore on. Growth in S&P/Case Shiller 10-city and 20-city indexes declined steadily, and almost identically, from 2.2% in June to 0.7% in September. Nationally, the FHFA purchase-only index grew by 0.7% in June and July, before dropping to 0.5% in August and 0.3% in September.
Bloomberg said price increases can be attributed to a lackluster supply of homes on the market, with fewer distress sales (Bloomberg.com Nov. 26).
Moody's analysts said that the FHFA's numbers--which don't account for cash purchases and agency mortgage-finance purchases--reflect weaker demand from non-investor customers.