United States: Growth in home prices slows in July
September 24, 2013
In July, the unadjusted S&P/Case-Shiller 20-city home price composite index rose 1.9% over the previous month, which was just shy of market expectations of a 2.0% rise. The reading came in below the 2.2% increase in June.
On an annual basis, home prices rose 12.4% over the same month last year, which marks an increase compared to the 12.1% rise recorded in June. Despite the strong readings recorded in the past months, prices still remain 21.2% below the July 2006 peak.
S&P emphasized that housing prices continue to rise but that the overall pace is slowing; monthly rates decelerated in 15 of the 20 cities surveyed between June and July. According to S&P, "more cities are experiencing slow gains each month than the previous month, suggesting that the rate of increase may have peaked." Moreover, applications for mortgages have slowed since lending rates were increase last May and the Fed's announcement that asset purchasing will continue is expected to only have a limited impact on the housing market.
Author: Carl Kelly, Economist