Home Prices in U.S. Rise at Slower Pace in Year to October

By Michelle Jamrisko Dec 30, 2014 11:36 AM ET

Home prices in 20 U.S. cities rose at a slower pace in the year ended in October, putting the market on better footing heading into 2015.

The S&P/Case-Shiller index of property values increased 4.5 percent from October 2013, the smallest gain in two years, after rising 4.8 percent in the year ended in September, a report from the group showed today in New York. The median projection of 24 economists surveyed by Bloomberg called for a 4.4 percent advance. Nationally, prices rose 4.6 percent after a 4.8 percent gain in the year ended in September.

While smaller increases will help put ownership within reach of more Americans as the job market improves and wage gains accelerate, prices are still up 25 percent from the depths reached following the recession. That rebound in property values has helped repair homeowners’ finances, which is contributing to gains in consumer confidence and spending that are driving the economic expansion.

“As you look forward, we’re considering a housing market that should be a more normal housing market, which means driven by the pace of income and other aspects of affordability,” said Michelle Meyer, a senior U.S. economist at Bank of America Corp. in New York, who correctly projected a slowing in home price appreciation. “Price appreciation should slow to fall more in line with the growth in income.”

Economists’ estimates in the Bloomberg survey ranged from gains of 3.9 percent to 5 percent. The S&P/Case-Shiller index is based on a three-month average, which means the October figure also was influenced by transactions in August and September.

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http://www.bloomberg.com/news/2014-12-30/home-prices-in-u-s-rise-at-slower-pace-in-year-ended-in-october.html