Case-Shiller Home Prices:  Sharp Increase in September

Bottom Line: Home prices accelerated in September, pushing year-on-year gains to 6.2%, now above than the 5-year average. Supply constraints revealed in both new and existing home inventory data, continue to drive prices higher. Gains continued in the strongest markets, Seattle, Vegas, Dallas and Portland. Slower markets, Chicago, the DC-area, and New York accelerated slightly more, though, pushing closer to the national average. Case Shiller 20-City Home Price Index ROSE by 0.5% (seasonally adjusted) in September to 201.2, compared with market expectations for an increase of 0.3%. Home prices are 6.2% ABOVE their year ago level. Nationwide home prices are now just 2.6% BELOW their April 2006 peak, near late 2005 levels and 47.1% ABOVE their January 2012 trough. On a non-seasonally adjusted basis, the home price index ROSE by 0.4% on the month. Housing prices rose in 20 of the 20 metro areas in September (on a seasonally adjusted basis) and in 20 of 20 metro areas on a year-over-year basis. Washington DC had the smallest year-over-year increase at 3.5% while Seattle had the largest year-over-year increase at 13.9%.