Home Prices Increased 0.5% in October from Prior Month
House prices rose 0.5% in October from September as buyers competed for a tight supply of properties for sale, the Federal Housing Finance Agency said.
The seasonally adjusted gain matched the average estimate of 11 economists, data compiled by Bloomberg show. Prices climbed 8.2% from a year earlier, the FHFA said today in a report from Washington.
Home prices have increased across the U.S. as investors drain markets of inventory and improving employment brings in more buyers. Gains are set to moderate as more sellers list properties, fewer distressed houses are available for investors to purchase and higher mortgage rates cut into affordability, said Mark Vitner, a Wells Fargo & Co. senior economist based in Charlotte, N.C.
“What we’re seeing now is more of a normalization,” he said in a telephone interview before the FHFA report was released. “Investors are leaving the market, traditional buyers are coming back and price appreciation is returning to a more normal pace.”
The FHFA index will rise about 8% this year and 4% next year, Vitner said.
U.S. homes gained $1.9 trillion in value this year, the biggest jump since 2005, as the real estate market rebounded from the recession, Zillow Inc. said last week. The country’s housing stock lost $6.3 trillion in value from 2007 through 2011 and has recovered 44% of that, according to the Seattle-based property-data firm.
The FHFA report showed prices increased 1.2% from September in the Mountain area, which includes Colorado and Arizona. In the Pacific region, with California and Oregon, the gain was 1.1%. Prices fell only in the East South Central region, including Alabama and Tennessee. The decrease was 1%.
The FHFA index measures transactions for single-family properties financed with mortgages owned or securitized by Fannie Mae and Freddie Mac. It doesn’t provide a specific price for homes. The gauge is 8.8% below its April 2007 peak.