WASHINGTON, USA

A measure of US home prices rose only modestly in October, adding to signs that prices have stabilised after experiencing big gains earlier this year

Real estate data provider CoreLogic yesterday said that prices increased 0.2 per cent in October from September. That’s up from a 0.1 per cent gain in September. But it is down sharply from a 0.9 per cent increase in August.

One reason for the slowdown is that the figures aren’t adjusted for seasonal patterns. Prices usually decline in the fall and winter, when sales slow.

Still, large gains during the previous months, along with higher mortgage rates, may be pricing some buyers out of the market.

Home prices have risen 12.5 per cent from a year ago. The increase could encourage more sellers to put their homes on the market, easing a shortage of homes for sale.

Only 1.88 million homes were on the market at the end of October, down 2.1 per cent from the previous month and the fewest since March.

The shortage of inventory has affected sales. Home re-sales fell in October for a second straight month to a seasonally adjusted annual pace of 5.12 million, the lowest since June, according to the National Association of Realtors. That pace is still six per cent higher than it was a year earlier. But it’s below the roughly 5.5 million sold each year in healthier markets.

Some sales were delayed in October due to the 16-day partial government shutdown, the Realtors’ group said. The shutdown prevented the IRS from verifying incomes, a critical part of the mortgage-approval process. Those sales may have been pushed into November or December.

But a measure of signed contracts to buy homes fell for a fifth straight month in October. That points to weaker final sales in the coming months. Final sales typically occur one to two months after contracts are signed.

According to CoreLogic, prices rose in October from the previous year in all states except New Mexico. The biggest gains were in Nevada (25.9 per cent), California (22.4 per cent), Georgia (14.2 per cent), Michigan (14.1 per cent) and Arizona (14 per cent).

Ninety-six of the 100 largest metro areas reported price gains from the previous year. That’s down from September, when all 100 cities reported gains.

The biggest increase was in Riverside, California, with 24.1 per cent, followed by Los Angeles (22.1 per cent), Atlanta (16.4 per cent), Phoenix (15.9 per cent) and Chicago (12.3 per cent).

Home prices are still about 17 per cent below the peak reached in April 2006, according to CoreLogic.