NEW YORK (REUTERS) - US single-family home price increases accelerated modestly in October, in line with expectations, but rising mortgage rates in recent weeks could pose a risk for the sustainability of the gains, a survey showed on Tuesday (Dec 27).
The S&P CoreLogic Case-Shiller composite index of 20 metropolitan areas rose 5.1 per cent in October on a year over year basis, up from a downwardly adjusted 5.0 per cent climb in September. October's result matched the estimate of 5.1 per cent from a Reuters poll of economists.
"Home prices and the economy are both enjoying robust numbers," said David M Blitzer, managing director and chairman of the index committee at S&P Dow Jones Indices.
"However, mortgage interest rates rose in November and are expected to rise further as home prices continue to out-pace gains in wages and personal income," Blitzer said.
"With the current high consumer confidence numbers and low unemployment rate, affordability trends do not suggest an immediate reversal in home price trends. Nevertheless, home prices cannot rise faster than incomes and inflation indefinitely."
Prices in the 20 cities rose 0.6 per cent in October from a revised 0.5 per cent in September on a seasonally adjusted basis, the survey showed, outpacing expectations for a 0.5 per cent increase.
On a non-seasonally adjusted basis, prices increased 0.1 per cent from September.