Home prices continued to grow at a steady pace in the third quarter, edging up 3.2% in 3Q and rising 11.2% over the course of the last four quarters, the latest S&P/Case-Shiller Home Price Indices show.

Also posting gains, the 10- and 20-city composites, which escalated 0.7% month-over-month and 13.3% year-over-year.

"The second and third quarters of 2013 were very good for home prices," said David Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices. "The National Index is up 11.2% year- over-year, the strongest figure since the boom peaked in 2006. The 10-City and 20-City Composites year-over-year growth of 13.3% was their highest annual numbers since February 2006."

Meanwhile, although 13 of 20 cities reported higher year-over-year growth rates, 19 cities witnessed lower monthly returns in September when compared to August.

According to Jed Kolko, chief economist and vice president of analytics with Trulia, September showed the biggest month-over-month increase since April for the 20-metro index.  

Twelve cities posted double-digit annual returns, as the West maintained its lead with Las Vegas, San Francisco, Los Angeles and San Diego home prices rising  29.1%, 25.7%, 21.8% and 20.9% year-over-year, respectively.

The west coast cities of San Francisco and Los Angeles experienced their highest annual returns since March 2001 and December 2005. And while Chicago has not posted double-digit growth, the city recorded its highest year-over-year gains since November 2005.   

"The strong price gains in the West are sparking questions and concerns about the possibility of another bubble. However, the talk is focused on fear of a bubble, not a rush to join the party and buy," Blitzer explained.

In fact, Quicken Loans Vice President Bill Banfield emphasized that the housing market is not running out of steam.

"September home prices continued to make monthly gains, with annual growth in the double digits. This continues to be encouraging news for homeowners that have been waiting to list their homes, and a welcome sign for buyers looking for increased inventory," Banfield added.

The housing market is still recovering despite some of the momentum slowing down, according to the chairman of the S&P indices.

"The longer run question is whether household formation continues to recover and if homeownership will return to the peak levels seen in 2004," Blitzer concluded.

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