U.S. home prices increased 2.5% in the third quarter, compared to the second quarter, according to FNC's Residential Price Index.
Although U.S. home sales are down, overall, the mortgage technology company says in its report that the ‘strong growth of home prices during the third quarter’ is an indication that the ‘housing recovery continues to broaden across the country.’
According to the National Association of Realtors (NAR), pending home sales declined for the fourth consecutive month in September, as higher mortgage interest rates and higher home prices curbed buying power. Pending home sales, based on contract signings, fell 5.6% compared to August, and were 1.2% below those of September 2012, according to NAR. Pending home sales reached their lowest level since December 2012.
According to FNC's price index report, the increase in home prices in the third quarter was driven in part by declining foreclosure sales.
As of September, foreclosure sales nationwide accounted for 13.4% of total home sales, up slightly from August's 12.7% but down from 16.6% a year ago, the report states.
However, because housing demand traditionally tapers off in the winter, home prices are expected to stabilize in the coming months, according to FNC.
Also indicating that home prices will level off, the leading October sales-to-list price ratio fell to 96.0 from 96.5 in July and August, the firm reports.
On a monthly basis, home prices (excluding distressed homes) increased about 0.5% in September, compared to August, according to the report.
On a year-over-year basis, home prices were up a modest 6.2% from a year ago, or 5.7% if measured quarterly.
FNC's 30-city and 10-city composites exhibit similar month-over-month price momentum – but faster accelerations in year-over-year growth at 6.7% and 6.8%, respectively.
Cities that had the largest home price increases for September, compared to
August, included Miami, Baltimore, Charlotte, N.C. and Riverside, Calif. – each with about a 2% increase. Las Vegas, Los Angeles and Phoenix also recorded sizable increases in September at 1.4%, 1.2% and 1.2%, respectively, after a relatively flat August.
For more on FNC's report, click here.