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US home price growth rises for the second straight month

Amanda Fung
This Friday, March 21, 2014, photo, shows a home for sale in Cleveland Heights, Ohio. Entering the 2014 spring buying season, the U.S. housing market faces an unusual dilemma: Too few people are selling homes. Yet too few buyers can afford the homes that are for sale. A 13.4 percent jump in the average price of a home sold last year, according to the Standard & Poor's/Case-Shiller 20-city index, hasn’t managed to coax more homeowners to sell. And combined with higher mortgage rates, higher prices have made homes costlier for first-time buyers as well as for all-cash investors. (AP Photo/Tony Dejak, File)
(AP Photo/Tony Dejak, File)

Home price growth in the U.S. is back on the rise, increasing for the second consecutive month.

Standard & Poor’s said Tuesday that its S&P CoreLogic Case-Shiller national home price index posted a 3.2% annual gain in September, up 3.1% from the previous month. The results were below analyst estimates of 3.25%, according to Bloomberg. The increase follows 16 months of deceleration. The 20-City Composite was unchanged, posting a 2.1% annual gain — up from 2% and above analyst estimates of 2.01%.

“After a long period of decelerating price increases, it’s notable that in September both the national and 20-city composite indices rose at a higher rate than in August,” said Craig Lazzara, managing director and global head of index investment strategy at S&P Dow Jones Indices, in a press statement. “It is, of course, too soon to say whether this month marks an end to the deceleration or is merely a pause in the longer-term trend.”

The results are in line with a recent report by the National Association of Realtors that revealed median existing home prices climbed 6.2% from to $270,900 in October from a year ago — the strongest price appreciation since June 2017 and the 92nd consecutive month of year-over-year price gains.

It also follows other positive housing data. Last week, the NAR said existing home sales rose at the fastest pace in more than two years amid lower mortgage rates and a shortage of properties for sale. Additionally, separate data revealed that building permits, which indicates the creation of housing in the future, jumped to a more than 12-year high. New home sales fell 0.7% to a seasonally adjusted annual rate of 733,000 units in October, according to the Commerce Department Tuesday morning.

For the fourth straight month, Phoenix led the 20-City Composite in terms of price growth posting a 6% year-over-year price increase. It was followed by Charlotte with a 4.6% increase and Tampa with a 4.5% increase. Half of the 20 cities reported gain in September.

Amanda Fung is an editor at Yahoo Finance.

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