(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.
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.
- 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.