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The numbers: The S&P CoreLogic Case-Shiller 20-city index rose by 2.2% in October versus a year ago. On a monthly basis, this index increased 0.1% in October compared with September on a seasonally adjusted basis.
At the national level, home prices were up on an annual basis by 3.3%, which represents an increase from September’s annual rate of home-price appreciation.
What happened: Phoenix saw the highest home-price appreciation in the country in October, posting a 5.8% year-over-year increase. Tampa, Fla., was next with a 4.9% uptick, followed by Charlotte, N.C., with a 4.8% increase. San Francisco, meanwhile, experienced a decrease in home prices on an annual basis for the third consecutive month.
Overall, home prices rose more substantially in October than in September for 12 of the 20 cities in the Case-Shiller Index.
“It is, of course, still too soon to say whether this marks an end to the deceleration or is merely a pause in the longer-term trend,” said Craig J. Lazzara, managing director and global head of index investment strategy at S&P Dow Jones Indices.
The big picture: The Federal Housing Finance Agency also released its monthly home-price index Tuesday, which found that home prices rose 0.2% nationally between September and October and 5% year-over-year.
Regionally, the FHFA found that home prices actually moved lower between September and October in some parts of the country. Prices dropped 0.5% on a monthly basis in the East North Central region, which includes Michigan, Wisconsin, Illinois, Indiana and Ohio. In the West North Central region, which includes North Dakota, South Dakota, Minnesota, Nebraska, Iowa, Kansas and Missouri, prices fell 0.2%, the FHFA reported.
Home prices are expected to continue rising in 2020, though economists’ predictions differ as to how much they will increase. Two factors that are expected to help lift home prices in 2020 are the continued low inventory of homes for sale and affordable mortgage rates.
On a local level though, smaller cities away from the coasts such as Boise, Idaho, are primed to see more explosive home price growth in 2020 as people look to buy homes in more affordable parts of the country and leave the pricy markets in states like California and New York.
What they’re saying: “The decline in mortgage rates, down about one percentage point for fixed-rate loans from one year ago, has supported a rise in sales activity and home prices,” CoreLogic CLGX, +0.25% chief economist Frank Nothaft.
“The moderately rising home prices of late 2019 suggest the economy is approaching a point where prices are beneficial for both buyers and sellers. However, the strain of low inventories at most price points suggests prices will continue to rise into the foreseeable future,” said Bill Banfield, executive vice president of capital markets at Quicken Loans.
Market reaction: The Dow Jones Industrial Average DJIA, -0.07% and S&P 500 SPX, -0.02% both moved slightly lower in Tuesday morning trades as 2019 draws to a close. The 10-year Treasury yield TMUBMUSD10Y, +2.15%, however, rose slightly as reports emerged that Chinese trade negotiators were expected to visit Washington this weekend to sign the phase-one trade deal.
