Home prices extended their run of increases to six months in September with a 2.1 percent bump in the S&P/Case Shiller 10-City Index and a +3.0 percent change in the 20-City Index. During the third quarter the Composite Index rose 2.2 percent from the second quarter and 3.6 percent from the third quarter of 2011. Average home prices across both the 10-City and 20-City indices increased 0.3 percent in September and 17 of the 20 MSAs posted better annual returns in September than they did in August.
David M. Blitzer, Chairman of the S&P Index Committee said, "Home prices rose in the third quarter, marking the sixth consecutive month of increasing prices. In September's report all three headline composites and 17 of the 20 cities gained over their levels of a year ago. Month-over-month, 13 cities and both Composites posted positive monthly gains."
Blitzer said the September figures marked the beginning of the seasonally weak part of the year and the figures, which are not seasonally adjusted, showed five cities with lower prices in September versus only one in August, however seasonally adjusted figures reversed the pattern and only one city lost ground in September compared to two in August. This shows that, despite the season, housing continues to improve.
Phoenix was the city with the greatest price improvement, up 20.4 percent on an annual basis. Atlanta finally saw a slight increase of 0.1 percent to end 26 straight months of annual price declines. Chicago and New York were the only two cities to post negative annual numbers, down 1.5 percent and 2.3 percent respectively. They also declined 0.6 percent and 0.1 percent on a monthly basis.
"Thirteen of the 20 cities recorded positive monthly returns," Blitzer said. Boston, Charlotte, Chicago, Cleveland, and New York saw modest drops in home prices in September as compared to August. Tampa and Washington DC were flat. With six months of consistently rising home prices, it is safe to say we are now in the midst of a recovery in the housing market."
As of September average home prices across the U.S. as gauged by both the 10-City and 20-City indices have returned to autumn 2003 levels. Measured from their June/July 2006 peaks both indices are down approximately 29 percent and each has now risen about 9 percent above the recent lows posted in March 2012.
The Case-Shiller indices track home prices on a scale with a base of 100 representing home prices in January 2000 for a typical home located within the subject market. Only three cities, Atlanta, Detroit, and Las Vegas remain below the index base with Detroit, despite a 7.6 annual increase, having a level of 79.82.