Oct
30

Chicago Home Prices Grow at a Slower Pace in August

October 30, 2013

Case-Shiller Home Price Index: Composite 20 Chart

Home price gains in the Chicago area slowed in August but on a year-over year basis prices are up 8.7 percent, according to a widely watched monthly home price index released Tuesday.

On a national level, annualized home prices in August rose 12.8 percent, the highest annual increase since February 2006, said the S&P/Case-Shiller home price index.

Chicago-area home prices rose 1.6 percent in August, from July, marking the sixth consecutive month of improvement in prices from the previous month. August’s gain followed a 3.2 percent increase in July, from June.

The condo market showed improvement as well, with prices rising 1.6 percent in August, from July, and were up 14 percent year-over-year. A lack of new condo development, primarily because developers largely have shifted to apartment construction, has helped the recovery of that housing sector.

Local home prices in August were on par with where they were in February 2003, before the housing market’s bubble. Condo prices are akin to their fall 2002 levels.

The Chicago market wasn’t alone is showing decelerated pricing growth.

While all 20 cities showed higher prices in August versus a year ago, 16 of them had lesser gains than in July, the research showed.

Home prices changes for the national index, which is comprised of 20 cities, peaked in April. “Recent increases in mortgage rates and fewer mortgage applications are two factors in these shifts,” said David Blitzer, chairman of S&P Dow Jones Indices’ index committee.

Also on Tuesday, the Federal Housing Finance Agency reported that its national index of mortgage rates continued to rise in September. The average interest rate for mortgages, including initial fees and charges assessed over the life of the loan was 4.51 percent in September, compared with 4.4 percent in August.

This post was originally published in the Chicago Tribune on Oct. 29, 2013.

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