Home prices continued rising in September, but many cities posted smaller monthly gains, according to a closely-watched barometer of the housing market.
The 20-city Standard & Poor’s/Case-Shiller Index increased 0.7% in September from August and was 13.3% ahead of a year ago, S&P said Tuesday.While 13 of 20 cities showed higher year-over-year growth rates than in August, 19 cities had lower monthly increases in September than August.
The report shows a housing market seemingly strong enough to tolerate small increases in mortgage rates, despite declining numbers of home sales in recent months, Barclays economist Michael Gapen said. And the outlook for prices is still solid heading into next year, as unemployment will dip below 7% of the work force on its way to 6.5%, said Joel Naroff, president of Naroff Economic Advisors.
“It’s a good sign for future sales, and for new construction,” said Naroff, arguing that higher prices will enable people whose mortgage balances have been higher than their homes’ value until recently to sell their homes and trade up. “It will bring many more houses onto the market.”