Home prices grew in the first month of the fourth quarter, showing that a slow-but-steady recovery throughout the country, which could lead to a spike in mortgage activity.
According to the Home Price Indices from Standard & Poor’s and Case-Shiller, home prices rose more than 4 percent during the 12-month period ending in October for the 20 cities surveyed by the firms.
The 10-city composite, which includes the biggest housing markets throughout the country, also bumped up from the year before, climbing 3.4 percent, the report indicates.
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“Annual rates of change in home prices are a better indicator of the performance of the housing market than the month-over-month changes because home prices tend to be lower in fall and winter than in spring and summer,” said David M. Blitzer, chairman of the Index Committee at S&P Dow Jones Indices. “Both the 10- and 20-City Composites and 19 of 20 cities recorded higher annual returns in October 2012 than in September. The impact of the seasons can also be seen in the seasonally adjusted data where only three cities declined month-to-month.”
Blitzer added that significant improvements in hard-hit real estate segments, such as Detroit, indicate just how much the overall market has bettered in 2012. Prices in the Motor City rose 10 percent on an annual basis, according to the report.
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Another city to see a marked spike in prices year-over-year was Phoenix, where they were up 21.7 percent. Other MSAs to post notable price hikes from a year earlier include Minneapolis, San Francisco, Miami and Las Vegas, each of which saw price bumps of at least 8 percent from October 2011.
Rising sale prices and other positive housing trends are likely to continue in 2013, according to one major real estate analyst.
“An organic recovery in the housing market really took hold in the latter half of 2012, and this improvement is echoed in some of the most optimistic price projections we’ve seen in years from this group,” said Zillow chief economist Stan Humphries.
Image: Harmony, via Flickr