Home prices are rising much more slowly than last year, according to two reports released 26th August, 2014.
U.S. home prices rose 0.8 percent in the second quarter of 2014 compared to the previous quarter, according to the Federal Housing Finance Agency’s seasonally adjusted house price index. Year after year, prices climbed 5.2 percent in the second quarter compared to the same quarter last year.
Not good enough?
This is the 12th consecutive quarterly increase in the index, but it’s not as strong as numbers seen last year.
“The extraordinary price appreciation observed over the last few spring seasons was not evident in the second quarter of this year,” FHFA principal economist Andrew Leventis says. “FHFA’s data indicate that house price appreciation in the quarter was near or below the baseline rate of inflation in most states.”
The FHFA index is calculated, using home sales price information from mortgages sold to or guaranteed by Fannie Mae and Freddie Mac.
More evidence that rising prices have slowed
The S&P/Case-Shiller Home Price Index, another closely watched housing report, also shows home price growth has been coming down. According to data released Tuesday, the national home price index increased 6.2 percent in the 12 months that ended in June. The year-over-year change last year was 7.1 percent.
“Home price gains continue to ease as they have since last fall,” says David M. Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices. “For the first time since February 2008, all cities showed lower annual rates than the previous month.”
Although the latest numbers are not great news for homeowners and home sellers, there’s no need to be concerned about the possibility of prices declining.
“Other housing indicators — starts, existing-home sales and builders’ sentiment are positive. Taken together, these point to a more normal housing sector,” Blitzer says.