The latest S&P/Case-Shiller home price indices show that home price growth continues to slow, but there’s more to the story than the headline numbers.

According to the report, the 10-City Composite gained 5.5% year-over- year and the 20-City 5.6%, both down from the 6.7% reported for July. The National Index gained 5.1% annually in August compared to 5.6% in July.

I know what you're thinking. I can see your face from here. 

But easy now. 

Gregory Bird, an economist at Moody’s Analytics, says that despite the soft patch that prices have hit, it is notable that every metro area covered in this release recorded price growth compared with its year-ago level. Price growth ranged from a 0.8% gain in Cleveland to a 10.5% increase in Miami.

“House price appreciation decelerated in August as year-over-year price growth braked to its slowest pace since November 2012, and both the 10-city and 20-city indexes experienced their fourth consecutive seasonally-adjusted month-to-month price decline,” Bird said in a note to HousingWire. “On the positive side, the national index, a recent addition to the monthly release by S&P, has exhibited more resilience than either the 10-city or 20-city house price measures, signaling a small divergence currently between the largest metropolitan areas and the rest of the country.”

Nela Richardson, chief economist for Redfin, meanwhile, notes that it’s condo prices that are leading single-family homes in terms of month-over-month declines, which may be beneficial for first-time buyers. 

“Builders have put a lot of eggs in the multifamily basked based on demographic changes and buyer demand,” Richardson said. “The fact the prices are decelerating in the condo market first may spell good news for two very different types of buyers: first-time buyers trying to find entry level deals and urban buyers looking at high-end dwelling.”

Richardson says it’s not unusual for condo prices to decelerate at a faster rate than single-family home prices.

“What is unusual is the number of cities where condo prices continue to be strong and actually top the price growth of single-family homes,” she said. “Those place include San Diego, Seattle, Ventura County, West Palm Beach, Orlando and Fort Lauderdale.  These are all spots with a fairly strong international investor presence and places where house prices are relatively low compared with super-priced cities like San Fran and San Jose.” 

But it’s not all about the condo sales.

“We’re also seeing a third group of cities, mainly in the South, like Atlanta, Austin and Dallas, where single-family house price growth is toppling that of condo prices by a wide margin,” she said.

Bird says that the fact that the pace of house price appreciation is slowing makes sense in light of the existing home market becoming a bit looser than a year ago.

“The seasonally adjusted inventory-to-sales ratio for single- family homes for September 2014 was 5.2 months; in September 2013, the ratio was 4.8 months. However, the market is not close to being oversupplied, but rather a bit more balanced, which equates to more reasonable year-ago price growth than the double-digit percentage increases witnessed all of last calendar year,” Bird said. “This slight loosening in the existing-home market is likely driven by the combination of more inventory available for sale, due to improved equity positions for some homeowners, and the waning of investor demand in many of the most distressed markets.

“While the steady deceleration in year-ago price growth is ominous, prices will continue to head higher over the next year, albeit at a modest pace, due to single-family home building still lagging estimated household formation,” Bird said. “Furthermore, support for price gains will also come from accelerating employment growth, rising incomes, pent-up demand being released and better access to mortgage credit.”

He says that supply-side constraints, such as shortage of labor and available lots, provide upside risk to house prices, as weaker homebuilding would produce stronger than anticipated house price appreciation.

Bird said that the downside risks include the inability of many households to digest a large increase in mortgage interest rates as well as the continued lack of participation of first-time homeowners, who expand the universe of homebuyers.

But that's just two economists. We need a third to round this out. 

"You there. Paul Diggle. What is your opinion?"

Paul Diggle, property economist for Capital Economics, was sanguine.

“All this is consistent with the further increase in the rental rate and the decline in the homeownership rate in the third quarter. Some 35.6% of households are renting, the highest share since 1995, while 64.4% are homeowners,” Diggle said. “Our long-held position is that the homeownership rate will bottom out at 64%. That said, tentative signs that cash-buyers and investors are starting to back away at the same time as first-time buyers are becoming more active mean that the floor for the homeownership rate is within sight.”

Looking ahead, Richardson said, Redfin data shows prices growth slowing to just under 4% year over year in September. 

Normally this much optimism leaves me feeling this way.

"You know, people tell me I kind of look like Han Solo."

But separately for the print version of HousingWire, I've been talking a lot to Jonathan Smoke, chief economist for, and this is a guy who doesn't spin numbers willy-nilly or for any reason. He's as grounded as it gets.

Here's his take on prices in a broader context.

"When I look across broad perspective in a year where we’re seeing deceleration in home prices, the U.S. looks likely to end 2014 year-over-year around 5-6%,” Smoke said. “Our forecast model for 2015 is that deceleration continue and national home prices will be up YOY in the 4-5% range, and in a handful of markets we will likely see close to double digit price increases reflecting strong to limited to supplies.”