This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

[video] Home Prices Rise at Fastest Annual Pace Since February 2006 (Update 1)

Updated from 9:13 a.m. ET with additional information

NEW YORK (TheStreet) -- Home prices rose 13.3% year-over-year in September, the fastest annual pace since February 2006.

The widely followed S&P Case-Shiller 20-City Composite Index rose 1% in September from August, on a seasonally adjusted basis. Economists expected a 0.9% rise according to consensus estimates from Bloomberg.

Unadjusted for seasonality, prices were up 0.7% in line with estimates.

The U.S. National Home Price Index rose 3.2% in the third quarter of 2013 and is up 11.2% in the last four quarters, the strongest figure since the peak in 2006.

The Case- Shiller Index is based on a three-month moving average and therefore reflects price trends for the months of July, August and September. It is also based on closed transactions, which means contracts to buy homes were signed a couple of months earlier.

Regionally, the West continues to lead the recovery, with las Vegas gaining 29.1% year-over-year, followed by San Francisco at 25.7%.

Cities such as San Francisco, Los Angeles and Chicago posted their highest yearly gains since 2005. The 20-City Composite Index is up 23.6% from the March 2012 bottom and is still about 20% below its previous peak.

While the data for September is strong, it also points to a continued slowdown in monthly gains. While 13 of the 20 cities posted stronger annual gains, 19 of the 20 cities saw prices decelerate in September. Las Vegas went from a monthly gain of 2.9% in August to 1.3% in September.

The slowdown in monthly gains is however seen as welcome news in some parts of the country such as California, where rapid price increases have sparked concerns of a bubble.

S&P's David Blitzer said those worries could now be abating. "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," he said in a statement.  "Moreover, other data suggest a market beginning to shift to slower growth rather than one about to accelerate. Existing home sales weakened in the most recent report, home construction remains far below the boom levels of six or seven years ago and interest rates are expected to be higher a year from now. "

He added that for the long-term question for the housing recovery is whether household formation will continue to recover and whether homeownership will reach peak 2004 levels.

Homeownership today is round 65% compared to its peak of 69%. Some economists believe that the homeownership rate will not recover to the previous peak.

-- Written by Shanthi Bharatwaj in New York.

Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,067.56 -30.89 -0.18%
S&P 500 2,001.53 -1.84 -0.09%
NASDAQ 4,596.5470 +16.2760 0.36%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs