US home price growth slows for 11th consecutive month

WASHINGTON — U.S. home prices rose in October at a slightly slower pace, as real estate sales have fallen and affordability has increasingly become a challenge for potential buyers.

The Standard & Poor’s/Case-Shiller 20-city home price index increased 4.5 percent in October from 12 months prior. The figures reported Tuesday mark the eleventh straight month of price gains decelerating and the smallest gain since October 2012.

Home prices in Chicago rose 1.91 percent in October compared with a year earlier. Prices were down nearly 1 percent compared with September, Standard & Poor’s/Case-Shiller reported.

The slowdown in price growth comes after surging double-digit increases for much of 2013. Home values climbed as the market recovered from bottoming out in 2011 in the aftermath of the housing bust and the Great Recession. But home prices have outpaced lackluster wage growth, leaving many potential buyers unable to afford homes and causing both sales and price growth to stall this year.

The recent decline in mortgage rates has yet to bring more buyers into the market. Simultaneously, there are fewer distressed properties and bargains coming onto the market that attract investors as buyers.

Still, there are signs that broader improvements in the U.S. economy may be causing prices to rise faster in some cities. Compared to September, eight cities reported stronger year-over year prices growth in October. This includes San Francisco (up 9.1 percent), Denver (7.2 percent) and Tampa (6.1 percent).

The Case-Shiller index covers roughly half of U.S. homes. The index measures prices compared with those in January 2000 and creates a three-month moving average. The October figures are the latest available.

BY JOSH BOAK, AP Economics Writer