November 27, 2013

Home price growth slows on shutdown, interest rate hikes

The government shutdown and higher interest rates are hampering national home prices.

The Associated Press

WASHINGTON — U.S. home prices rose more slowly in September than in August, a sign that weaker sales are preventing the kinds of sharp price gains that occurred earlier this year.

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FILE - In this Wednesday, Sept. 18, 2013, file photo, a "For Sale" sign hangs in front of a house in Walpole, Mass. Standard & Poor's/Case-Shiller reports on U.S. home prices in September, on Tuesday, Nov. 26, 2013. (AP Photo/Steven Senne, File)

The Standard & Poor’s/Case-Shiller 20-city home price index rose 0.7 percent from August to September, down from a 1.3 percent gain from July to August. That figure isn’t adjusted for seasonal variations, so the change reflects, in part, slower buying in late summer and fall.

Still, other recent reports show that previous gains in home prices, higher mortgage rates and the partial government shutdown last month have weighed on the housing market. Home resales and signed contracts to buy homes both fell in October.

“Other data suggest a market beginning to shift to slower growth rather than one about to accelerate,” said David Blitzer, chairman of the S&P Dow Jones index committee.

The Case-Shiller index covers roughly half of U.S. homes. It measures prices compared with those in January 2000 and creates a three-month moving average. The September figures are the latest available.

Monthly price gains slowed in 19 of the 20 cities tracked by Case-Shiller index. Prices rose 1.3 percent in Las Vegas compared with a 2.9 percent month-to-month gain in August.

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