US dwelling value progress slowed considerably in October

A sign "Home For Sale" in Louisville, Kentucky. Photographer: Luke Sharrett / Bloomberg

Luke Sharrett / Bloomberg

US house price growth slowed for the third straight month in October.

A measure of home prices in 20 U.S. cities rose 18.4% from 19.1% in September, the S&P CoreLogic Case-Shiller Index showed Tuesday.

According to the index, prices in Phoenix rose 32%. Tampa, Florida and Miami followed with gains of 28% and 26%, respectively.

Home prices have skyrocketed during the pandemic, creating fierce competition for shortages in the U.S. The 20-city index reached a record in July after 13 price gains in a row.

And while interest rates are likely to rise, many factors should contribute to sustained, albeit slower, price growth, said Kwame Donaldson, Zillow's senior economist, in a statement emailed to National Mortgage News.

"The US labor market is promoting low unemployment and robust wage growth, a tsunami of millennials is reaching the age limit for first-time home buyers, and sales inventories plummeted unexpectedly in October and November," he wrote. "Home price appreciation will continue to slow from unsustainable levels this summer, but these conditions ensure that growth over the next year will be comfortably above normal rates."

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