Home prices up more than expected: S&P/Case-Shiller

U.S. single-family home prices showed a stronger-than-expected rise in September on a yearly basis, but the rate of the increase decelerated from August, a closely watched survey showed on Tuesday.

"The overall trend in home price increases continues to slow down," David M. Blitzer, managing director and chairman of the index committee at S&P Dow Jones Indices, said in a statement.

The S&P/Case Shiller composite index of 20 metropolitan areas gained 4.9 percent in September over September 2013. In August, it rose 5.6 percent on a yearly basis. A Reuters poll of economists forecast a 4.6 percent increase.

Economist Robert Shiller told CNBC's "Squawk on the Street" the reading was not exciting, and he noted that the winter season is historically slow for home sales.

''We haven't expected exciting growth for a while, but it does look like seasonally adjusted home prices are still growing," he said.

On a seasonally adjusted monthly basis, prices in the 20 cities rose 0.3 percent in September. A Reuters poll of economists had forecast an increase of 0.1 percent.

A house for sale in Sarasota, Florida
Scott Mlyn | CNBC
A house for sale in Sarasota, Florida

Nonseasonally adjusted prices were unchanged in the 20 cities on a monthly basis, short of expectations calling for a 0.2 percent rise.

Residential investment took a plunge during the financial crisis and it's not coming back yet, Shiller added.

"It's got to come back eventually because the population continues to grow and there's a fundamental shortage of housing if they haven't been building," he said.

Americans have soured on home ownership in part because the lofty expectations for real estate values proved unrealistic, he said. He added that home prices don't grow much more quickly than the consumer price index.

Correction: This story corrected that home prices rose more than expected in September on a yearly basis.

—Reuters contributed to this story.