Economists forecast that the 20-city index increased by 0.51% month-on-month in October, and by 5% year-on-year, according to Bloomberg.
In September, the year-on-year index rose to the highest level since July 2006, when the most recent housing boom topped out. Seattle recorded the highest annualized price increase, up 11%, followed by Portland and Denver.
Home prices have been rising as a healthy jobs market and historically low mortgage rates have increased demand for homeownership since the financial crisis. Also, constrained supply helped to bid up the prices of existing homes, especially in desirable East Coast and West Coast cities.
Heading into 2017, at least two things are top of mind for housing economists. First, the prospect of higher mortgage rates may prompt prospective buyers who were dragging their feet to quickly lock in the lowest rates they can. Also, if strong demand continues to push prices higher but wages don't keep up, affordability could worsen.