Home-price gains in the nation’s largest cities slowed in October, although they continued to show strong annual increases, according to a leading gauge.
The S&P/Case-Shiller index of 20 large U.S. metropolitan areas, released Tuesday, rose 0.2% from September, below economists' expectation of a 0.7% gain. Prices rose 0.7% in September.
Prices were 13.6% higher than October 2012 -- the largest gain since February 2006.
But there was a cooling trend for the month: Eighteen cities saw price gains decelerate compared with a month earlier. In half of those, including San Francisco and Seattle, prices fell.
“Home prices increased again in October,” David M. Blitzer, chairman of the index committee at S&P Dow Jones Indices, said in a statement. “However, monthly numbers show we are living on borrowed time and the boom is fading.”
The housing market rebounded sharply earlier this year, as families and investors rushed in, lured by rock-bottom interest rates and the belief that the bottom of the market had passed.
However, that torrid rebound has cooled in recent months as buyers have struggled with higher rates and prices. The market has also entered a typically slower season, when many families stop their home search around the holidays.
The Case-Shiller index, created by economists Karl E. Case and Robert J. Shiller, is widely considered the most reliable read on home values.
The housing index compares the latest sales of detached houses with previous sales, and accounts for factors such as remodeling that might affect a house's sale price over time.
As of October, average home prices across the nation were back to their mid-2004 levels, according to the index.