Home-price growth slowing down, Case-Shiller says
By Ruth Mantell
September 24, 2013
WASHINGTON (MarketWatch) – U.S. home prices in July rose at the
smallest monthly pace since March as most cities tracked by a gauge from
S&P/Case-Shiller saw slower growth, according to data released Tuesday.Home
prices rose 1.8% in July, down from 2.2% in June, according to the Case-Shiller
report. After seasonal adjustments, prices were up 0.6% in July, the lowest
gain since September.
It looks like higher mortgage rates are hitting the housing
market, said David Blitzer, index committee chairman at S&P Dow Jones
Indices. Among the 20 cities tracked by S&P/Case-Shiller, 15 saw slower
monthly price growth in July.
Mortgage rates started rising in early May on speculation that the
Federal Reserve could start cutting its large-scale asset purchases that have helped
keep home loans relatively cheap. Last week the Fed announced that it is not
going to start tapering these purchases yet, but that news is likely to have
only a temporary impact on housing, Blitzer said.
“The rate of increase may have peaked,” Blitzer said.
A low number of homes for sale, coupled with lots of pent-up
demand from buyers, has led to upward pressure on prices. Indeed, on a
year-over-year basis, home prices grew 12.4% in July, the fastest annual pace
since 2006. Still, home prices in July were about 21% below a 2006 peak.
Elsewhere Tuesday, the Federal Housing Finance
Agency, which regulates mortgage buyers Fannie Mae and Freddie Mac,
reported that home prices rose a seasonally adjusted 1% in July.
The FHFA said prices were up 8.8% from July 2012.