The breakneck pace of US home-price increases is slowing down, according to the Federal Housing Finance Agency.
The FHFA on Wednesday released its monthly house price index for June, and a report on the second quarter.
In every month during Q2, prices rose 0.2%, "a much more modest pace of appreciation than we’ve seen in some time" which reflects pressures from falling home affordability, according to Andrew Leventis, FHFA supervisory economist.
As housing demand failed to keep up with shrinking inventory, home prices rose.
"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," Leventis said (emphasis added).
This does not mean prices are now falling on aggregate. During Q2, home prices rose in every state except Vermont. The biggest quarter-on-quarter gains were seen in Oregon, Washington, Colorado, and Florida.
The FHFA's report showed that house prices rose 1.2% in the second quarter, and gained 5.6% compared to the same period a year ago.
The June index of 0.2% was below economists' forecast for 0.3%.
The economic calendar this week is full of housing data. On Tuesday, the Census Bureau said new home sales rose in July to a seven-year high.