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Home prices appear to be losing some of their spark, slowing down to a marginal increase of 0.3 percent on a seasonally adjusted basis in August compared to last month.
The 0.6 percent increase originally recorded in July was downwardly revised to 0.5 percent, the Federal Housing Finance Agency (FHFA) reported Thursday in their monthly Home Price Index (HPI), which is gathered from mortgages sold to, or guaranteed by, Fannie Mae and Freddie Mac.
According to the HPI, home prices were up 5.5 percent from August 2014 to August 2015. The index is also 0.9 percent below its March 2007 peak and nearly matches with the level recorded December 2006.
Seasonally adjusted monthly price changes from July 2015 to August 2015 for the nine census divisions ranged from -0.4 percent in the East North Central and Middle Atlantic divisions to +0.8 percent in the East South Central division, the report says. In addition, the 12-month changes ranged from +2.2 percent in the Middle Atlantic division to +8.3 percent in the Mountain division.
Earlier in this month, CoreLogic reported a very different view on home prices with a much large increase in August.
Employment gains, wage growth, and continued low mortgage rates are pushing home prices up both year-over-year and month-over-month.
In August, home prices recorded a 6.9 percent year-over-year gain for the single-family combined tier, including distressed sales, CoreLogic's U.S. Home Price Insights Report found. This will mark the 42nd consecutive month of year-over-year increases. Meanwhile, on a month-over-month basis, home prices rose 1.2 percent.
“Economic forecasts generally project higher mortgage rates and more single-family housing starts for 2016. These forces should dampen demand and augment supply, leading to a moderation in home price growth,” said Frank Nothaft, chief economist for CoreLogic.
Anand Nallathambi, president and CEO of CoreLogic said "continued gains in employment, wage growth and historically low mortgage rates are bolstering home sales and home price gains. In addition, an increasing number of major metropolitan areas are experiencing ever-more severe shortfalls in affordable housing due to supply constraints and higher rental costs. These factors will likely support continued home price appreciation in 2016 and possibly beyond.”
