NEW YORK CITY—The slowdown in home sale prices continued for the 10th consecutive month in September, with the S&P/Case-Shiller 10-City and 20-City Composite Indices issued Tuesday both showing smaller year-over-year gains than the month prior. To economists, the slowdown signals a stabilizing housing market, while in a separate announcement, Seattle-based Redfin reported that home sales showed the year's first Y-O-Y gain in October.

“The overall trend in home price increases continues to slow down,” says David Blitzer, managing director and chairman of the index committee at S&P Dow Jones Indices. He says the the 10- and 20-City Composites “continued their Y-O-Y downward trend, gaining 4.8% and 4.9%” compared to their Y-O-Y gains of 5.6% in August, while the National Index reported a month-over-month decrease for the first time since November 2013.

Looking at specific regions, Blitzer reports that the Northeast reported its first negative monthly returns since December of last year and its worst annual returns since December 2012, undercut by pricing in the Washington, DC and Boston markets. “The West and Southwest, previously strong regions, are seeing price gains fade,” he says. “The only region showing any sustained strength is the Southeast led by Florida; price gains are also evident in Atlanta and Charlotte.”

While the report may not have been positive for individual home sellers, economists took a more upbeat view. “You're getting to a market that's a little bit healthier, it isn't subject to these boom-bust cycles,” Thomas Simons, an economist at Jefferies LLC in New York City, told Bloomberg. “I view the market as generally being in the process of stabilizing. When prices are stable, the market functions a little better.”

Mewanwhile, Patrick Newport and Stephanie Karol, US economists with IHS Global Insights, call Tuesday's Case-Shiller results “a good report. Yes, home price growth is slowing nationwide, but the slowdown is caused by fundamentals: more construction releases price pressures, while fewer foreclosures mean that homes are no longer experiencing massive appreciation relative to recession-era fire sales.”

Redfin says October's volume of home sales was up 2.2% Y-O-Y, the first meaningful growth this year following an essentially flat September showing of 0.3%. Every previous month thus far in 2014 compared negatively to the year prior.

A decline in mortgage rates, lower unemployment and the continuing slowdown in home price appreciation all had something to do with it, Redfin says. However, the firm also cites two other important factors: income growth and September's increase in the number of homes for sale, thus giving buyers a reason to act in October. That being said, Auction.com said Tuesday that October's bulge in volume isn't likely to continue; click here for that story.

Instant Insights /

Home Price Gains Slow; October Volume Up

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