American enthusiasm for the housing market rose over the summer from the year's start, but expectations for future market performance have become more subdued, according to survey results released by Zillow. The company's latest Housing Confidence Index, released Tuesday, rose to 64.2 in its latest reading, up from 63.7 in January. The index, which is sponsored by Zillow and developed by Pulsenomics, ranges on a 100-point scale, with readings above 50 indicating overall positive sentiment.
Two of the three component sub-indices improved through the summer: the measure of current market trends and conditions rose more than half a point to 62.7, while the measure of homebuying plans and attitudes toward homeownership climbed more than two points to 62.4. On the other hand, the gauge of expected future changes in home values and affordability fell slightly, decreasing to 66.1. The drop falls in line with Zillow's forecast of home value growth halving over the next year to 3.1 percent.
U.S. home prices continued to grow for the eighth straight month in July, though gains slowed to a crawl. The Federal Housing Finance Agency's monthly House Price Index picked up a tenth of a percent from June to July, coming down after a revised 0.3 percent increase in June. For the 12 months ending in July, FHFA reported house prices were up nearly four and a half percent, putting the index 6.4 percent below its peak in April 2007 and roughly in line with where it was in July 2005. Month-to-month price increases were led by the East North Central and New England divisions, which saw growth of 0.4 percent. At the bottom end was the Middle Atlantic, where prices depreciated 0.5 percent over the month.