The closely-followed S&P/Case-Shiller home price index was up 13.6% compared to a year ago, the largest 12-month gain since early 2006, which was the height of the housing bubble. Prices have been improving at a faster annual rate every month for nearly two years. But with the prospect of rising mortgage rates, October prices were little changed from September.
"Housing data suggest that we may be close to the peak gains in prices," said David M. Blitzer, chairman of the index committee at S&P Dow Jones Indices. He said prices are expected to rise further in 2014, but the annual gain is expected to be in the single digits rather than the rapid rise recorded for much of this year.
The slowdown in price gains is probably good for the market, according to Stan Humphries, chief economist for price tracker Zillow.
"Consumers looking at more recent reports should embrace this slowdown, as it will make for a more balanced market in 2014 and beyond," he said.
The housing recovery has been a key area of strength in the U.S. economy. Significant drops in unemployment and home foreclosures have combined to drive a rebound in demand for homes.
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