WASHINGTON -- Solid sales pushed up U.S. home prices at a steady pace in August from a year earlier, a sign that the housing market is improving despite a slowdown in the economy.
The Standard & Poor's/Case-Shiller 20-city home price index rose 5.1 percent in the 12 months ending in August, according to figures released Tuesday. That's up from a 4.9 percent pace in July.
Home prices have risen at a 5 percent pace for most of this year, which economists see as more sustainable than last year's double-digit gains. Three years of solid hiring and historically low mortgage rates have enabled more Americans to buy homes. That's lifted sales of existing homes nearly 9 percent in the past year.
San Francisco and Denver both reported annual price gains of 10.7 percent, the largest of any city. Portland, Ore., had the third-biggest annual gain, at 9.4 percent.
On a month-over-month basis, the 20-city price index climbed 0.4 percent in August. Eighteen of 20 cities said prices increased. Prices slipped 0.1 percent in San Francisco and were unchanged in Charlotte, N.C.
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 August figures are the latest available.
Sales of previously owned homes jumped 4.7 percent in September to a seasonally adjusted annual rate of 5.55 million. That's a sign that the housing sector has so far been insulated from weaker growth overseas, which is slowing growth in the U.S. manufacturing and energy sectors.
But overall, the housing market's health is mixed. New home sales plunged in September to their lowest level since November 2014 and remain far below their long-run average.
The construction of new homes rose at a healthy pace in September and is up 12 percent so far this year compared with 2014. But the bulk of the growth has been fueled by condominiums and apartment buildings. Single-family home construction was flat in September.
The homeownership rate in the U.S. rose for the first time in two years in the third quarter.
The share of Americans who own their homes was 63.7 percent in the quarter, up from 63.4 percent in the previous three months, the Census Bureau reported Tuesday. It was the first quarterly increase since the third quarter of 2013.
The pool of potential buyers is expanding as U.S. employment improves and families who lost properties during the recession repair their credit and seek another chance at owning.
"It stands to reason that the homeownership rate is going to stabilize here -- why wouldn't it?" Neil Dutta, head of U.S. economics at Renaissance Macro Research LLC in New York, said after the data were released. "The housing market recovery seems to have gained traction over the past year, and we've seen home sales pick up, and we've seen some evidence that the first-time buyer is coming back."
More single-family homes are needed to increase overall supplies, hold down price gains and give potential buyers more choices.
The number of previously owned homes for sale has fallen 3.1 percent in the past 12 months. In September, the number of available homes was equal to 4.8 months of sales, below the six months that is typical of a balanced market.
Low mortgage rates are helping would-be buyers. The average rate on a 30-year fixed mortgage fell to 3.79 percent last week, its 13th straight week below 4 percent.
The U.S. home rental market cooled in September. The slowdown hit major hubs of the energy industry such as Dallas, Houston and Tulsa, while moderating the boom in tech centers such as San Francisco; San Jose, Calif.; and Denver.
Real estate data firm Zillow said Tuesday that median rents rose a seasonally adjusted 3.7 percent from a year ago, down from the annual pace of 4.1 percent in August. The slowdown likely reflects the 14.8 percent surge in apartment construction during the first nine months of 2015, as increasing supplies have tempered price appreciation.
Research by the CoStar Group, a real estate marketer, found that 158,000 apartment units are being built this year, the highest level in more than three decades.
Information for this article was contributed by Christopher S. Rugaber and Josh Boak of The Associated Press and Prashant Gopal of Bloomberg News.
Business on 10/28/2015