FHFA flags potential significant shift in US home prices in June
A potentially significant shift might be underway in US home prices, a government agency said.
Home prices Stateside grew by 1.2% quarter-on-quarter over the three months ending in June, according to the Federal Housing Finance Agency, and were up by 0.2% month-on-month in June. (consensus: 0.2%)
In comparison to the comparable year-ago period, they were up by 5.6% and by 5.7% in real terms.
Over the past five years the FHFA's home price index was up 29.75%.
“Although the appreciation rate for the second quarter was of similar magnitude to what we’ve been seeing for several years now, a close look at the month-over-month price changes during the quarter reveals a potentially significant market shift,” said FHFA Supervisory Economist Andrew Leventis.
“Our monthly price index indicates that in each of the three months of the quarter, the increase was only 0.2 percent. This is a much more modest pace of appreciation than we’ve seen in some time and most likely reflects accumulated pressures from significantly reduced home affordability,” Leventis said.
All states saw house prices rise in year-over-year terms, except for Vermont.
The largest increases were recorded in the Northwest and West with prices up 11.7% in Oregon, 10.3% in Washington, 10.2% in Colorado and 9.6% in Nevada.
Prices in Florida rose by 10.0%.
"We expect the housing market to remain in recovery mode and for home price appreciation to continue increasing at a steady, albeit unspectacular, pace for the rest of 2016 and 2017," Barclays's Michael Gapen said in a research note sent to clients.