- POSTED: 31 Dec 2013 23:22
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US home prices rose slightly in October, marking a continued softening in the housing market recovery, according to a report released on Tuesday.
WASHINGTON: US home prices rose slightly in October, marking a continued softening in the housing market recovery, according to a report released on Tuesday.
The S&P Case-Shiller 20-city composite home price index rose 0.2 per cent in October, following a monthly gain of 0.7 per cent in September. On a seasonally adjusted basis, the index was up 1.0 per cent.
The index posted a gain of 13.6 per cent year-over-year, the largest annual increase since February 2006, but smaller than the 13.8 per cent rise expected by analysts.
The annual gains have been in double-digit territory since March 2013, but "monthly numbers show we are living on borrowed time and the boom is fading", said David Blitzer, chairman of the index committee.
Ten cities posted price gains month-on-month, led by Las Vegas with an increase of 1.2 per cent.
Nine cities saw prices fall, while New York prices were flat.
The price slowdown in part reflects the rise in mortgage interest rates since the Federal Reserve revealed plans in May to cut its stimulus programme, a move The Fed finally took earlier this month.
In mid-December, the Fed began to reduce its monthly asset purchases by US$10 billion to US$75 billion.
"The key economic question facing housing is the Fed's future course to scale back quantitative easing and how this will affect mortgage rates," Blitzer said.
"Other housing data paint a mixed picture, suggesting that we may be close to the peak gains in prices. However, other economic data point to somewhat faster growth in the new year. Most forecasts for home prices point to single-digit growth in 2014."