Home prices in 20 US cities rose at the fastest pace in five months in October, posting a third straight acceleration as real estate markets showed fresh strength at the start of the fourth quarter.
The S&P CoreLogic Case-Shiller index of property values advanced 2.2% from October 2018, according to data that exceeded estimates in Bloomberg survey of economists. Prices rose 0.4% from a month earlier on a seasonally adjusted basis, also topping projections.
A separate report from the Federal Housing Finance Agency showed house prices climbed 0.2% in October from the previous month, less than the 0.4% median estimate of economists in a Bloomberg survey. Prices nationwide rose 5% from a year earlier, increasing in all nine regions measured, according to the data derived from conforming mortgages.
Lower mortgage rates and a robust labor market have helped consumers remain upbeat, luring potential home buyers and helping to lift prices. Phoenix, Tampa and Charlotte led gains, according to the S&P CoreLogic report.
Other data pointed to further stabilisation in the housing market. Contract signings to purchase previously owned US homes increased in November for the third time in four months, National Association of Realtors data showed.
“Housing data continue to be reassuring,” Craig Lazzara, global head of index investment strategy at S&P Dow Jones Indices, said in a statement, noting that stability was broad-based. “It is, of course, still too soon to say whether this marks an end to the deceleration or is merely a pause in the longer-term trend.”
“Demand for housing is unlikely to sustain the pace of recent rebound in 2020, as mortgage rates appear to have bottomed out and supply remains thin. Bloomberg Economics expects median home price appreciation for the year ahead to be in the low single digits.”
— Andrew Husby, economist
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Prices rose on an annual basis in 19 of the 20 cities in the composite measure. Phoenix led with a 5.8% increase, followed by a 4.9% gain in Tampa and 4.8% advance for Charlotte. San Francisco was the lone city to post a year-over-year decline.
Economists surveyed by Bloomberg had estimated a 2.1% annual gain and 0.3% on the month.