Recently released US housing figures reveal that property prices rose by 11.7 per cent nationally in the year to October, but indicate that on a quarterly basis price growth is starting to slow.
According to Clear Capital’s Home Price Index (HPI) for October, prices across the country rose by just 2.1 per cent in the third quarter of 2013, compared to 3.8 per cent in the second quarter.
Detroit, Michigan recorded the strongest quarterly property price growth of any major US metro area, with prices increasing by 7.8 per cent in the three-month period. The city also posted the second highest yearly prices gains (31.6 per cent); only Las Vegas, Nevada (32.4 per cent) recorded higher annual property price growth.
However, in spite of the rising prices in Detroit, average property values are currently just US$120,000 – still significantly lower than they were at their peak prior to the global financial crisis which began in 2008.
According to Clear Capital’s HPI, average national house prices in the US are now around US$210,000.
Other major US cities to record strong price growth in the third quarter of 2013 were Milwaukee, Wisconsin (4.9 per cent), Birmingham, Alabama (4.5 per cent), San Francisco (4 per cent) and Sacramento, both California (3.7 per cent).
The weakest performing major property market in the US during this period was Dayton, Ohio, where prices fell by 0.6 per cent in the third quarter and by 1.6 per cent year-on-year.
“While prices across the country saw another boost in October, gains are starting to taper over the last quarter, in what could be the tail end of the summer buying season,“ said Dr Alex Villacorta, vice president of research and analytics at Clear Capital. “We continue to see trends in the low tier price sector support a likely moderation ahead. And as we’ve maintained, moderation defines a healthy recovery. While some markets currently have eye-popping growth rates reminiscent of the housing run-up, these trends are mainly short term corrections as markets fall back in line with their long run levels.”
Article published 12th November 2013