US home price inflation slips in July, FHFA says

The rate of house price inflation in the US eased slightly last month, but economists said there remained room for them to rise a bit more quickly, albeit not a lot.

In seasonally-adjusted terms, in July the Federal Housing Finance Administration's Purchase-Only index edged up by 0.2% month-on-month.

But the year-on-year rate of price increases slipped from 6.7% in June to 6.5%.

Economists at Barclays Research had forecast an increase of 0.4% on the month and 6.6% on the year.

The biggest increases in prices versus June were seen in the Mountain and East South Central census divisions, where prices advanced by 0.7% and 0.6%, but in New England and the South Atlantic region they fell by 0.4%.

"Demand for homes is still strong and inventories are low, especially among existing units. As a result, we expect home prices to continue to appreciate in the coming months," said Barclays's Blerina Uruci.

"However, affordability indicators are also showing further deterioration in purchasing power of homebuyers which is likely to limit the scope for much faster appreciation than the current rate."