Bad news on U.S. homes front isn’t spilling into Portland area

Good news, Portland-area homeowner: Your humble abode is probably still rising in value, unlike those owned by your counterparts in much of the rest of the country.

Prices of single-family homes across the nation increased in October at the slowest rate in almost a decade, according to a housing index released Tuesday by Standard & Poor’s, giving more evidence of the housing market’s deceleration.

The S&P/Case-Shiller composite index showed a 2.4 percent year-over-year increase in the price of a single-family home based on prices of existing homes tracked over time in 10 metropolitan markets. For its 20-city composite index — the monthly index, including Portland, was released Tuesday for the first time — prices grew 2.9 percent, the slowest rate ever for that retroactively compiled data, according to the S&P index committee chairman, David Blitzer.

“Home price gains are continuing their steep deceleration,” said Robert Shiller, chief economist of MacroMarkets. “We can clearly see that the monthly price declines are widespread nationally.”

In its monthly statement announcing the index results, however, S&P identified two cities that bucked the national trend: “Interestingly, Seattle and Portland remain relatively strong, with annual returns as high as 14.1 percent and 13.2 percent, respectively.”

The two Northwest cities were the only ones among the 20 in S&P’s index to post double-digit year-over-year gains.

Six cities, meanwhile, showed average price declines. Detroit was the worst-performing market, losing 3.6 percent over the 12-month period, but joining it on the laggards list were several that had been among the nation’s highest fliers in recent years, including Boston, San Diego, San Francisco and Washington, D.C.

Most analysts predict continued slowing of sales amid a bloated inventory of homes.

The data is consistent with a report from the National Association of Realtors, which showed a tiny increase in sales of existing homes in October as the median home price fell by a record amount.

The Realtors association showed that the median sale price dropped to $221,000 in October, a decline of 3.5 percent from a year ago. That was the biggest year-over-year price decline on record.

Meanwhile, the inventory of unsold homes in October reached the second-highest level ever recorded. At the pace homes were being sold in October, it would take 7.4 months to sell the currently available homes.

The Federal Reserve has been closely watching the housing market as it tries to slow the economy’s growth without pushing it into a recession. The Fed has left rates unchanged for the past four meetings, after raising rates 17 straight times since 2004.

At its last meeting on Dec. 12, a statement from the Fed said, “Economic growth has slowed over the course of the year, partly reflecting a substantial cooling of the housing market.”

In recent quarters, economists had said the housing slump was creating a drag on the economy and pulling down gross domestic product growth. U.S. GDP fell to 2 percent in the third quarter amid a cooling real estate market.

The Associated Press and The Oregonian contributed to this report.