Case-Shiller home prices climbed 1.03% month-over-month in September, and were up 13.29% on the year.
This beat economists' expectations for a 0.9% month-over-month rise, and a 13% year-over-year rise.
This was also the biggest gain since February 2006.
August's numbers were revised down modestly, to show a 0.9% MoM rise, and a 12.8% YoY rise.
Home prices were up 3.2 in the third quarter and up 11.2% over the last four quarters.
“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," said David M. Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices, in a press release.
"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."
Millan Mulraine at TD Securities points out that the gains in home prices could be attributed to declining inventory of non-distressed properties, and not necessarily increasing demand — existing and pending home sales have been falling — "the continued upside in prices could be providing a fail signal on the strength of the housing recovery." He thinks this pace of home price growth isn't sustainable and expects it to slow to 5-8% in coming months.
Analysts have warned for some time that the pace of home price growth would slow.
Bank of America recently downgraded its 2013 home price forecast to 10% in 2013, from 11.8%. They attributed the downgrade to "the unanticipated spike in mortgage rates," that made their home price outlook seem "too optimistic."
Here's a look at the trajectory of home prices:
The FHFA will also release its home price data at 9 a.m..
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