Home prices rise at slow­est pace in nearly a year

Connecticut Post (Sunday) - - Transactions - By Christo­pher Ru­gaber

WASH­ING­TON — U. S. home prices rose in July at the slow­est pace in 10 months as climb­ing mort­gage rates be­come a more sig­nif­i­cant fac­tor for a grow­ing num­ber of prospec­tive buy­ers.

The S& P CoreLogic CaseShiller 20- city home price in­dex in­creased 5.9 per­cent in July com­pared with a year ear­lier, down from a 6.4 per­cent an­nual gain the pre­vi­ous month.

Home prices are ris­ing at twice the rate of wages, which has likely con­trib­uted to a cool­ing in the mar­ket this year. Sales of ex­ist­ing homes have dropped 1.5 per­cent in the past 12 months. Mort­gage rates last week reached their high­est level since May.

“Cou­pled with mort­gage rate in­creases, higher prices are sti­fling home sales as more buy­ers are priced out of the mar­ket,” Danielle Hale, chief econ­o­mist at Re­al­tor. com, said Tues­day af­ter the re­port was re­leased.

Las Ve­gas, Seat­tle and San Fran­cisco re­ported the big­gest an­nual gains, with all three cities see­ing dou­ble- digit in­creases. Yet in 15 of 20 cities, price gains were smaller in July than in the same month a year ear­lier.

The com­bi­na­tion of ris­ing home prices and higher mort­gage rates has made homes less af­ford­able, even as a strong job mar­ket and some signs of higher pay have lifted de­mand.

The av­er­age 30- year mort­gage rate rose to 4.65 per­cent last week, ac­cord­ing to mort­gage gi­ant Fred­die Mac. That is up from 3.83 per­cent a year ago.

Any rate be­low 5 per­cent is very low by his­tor­i­cal stan­dards, but many home­own­ers locked in rates be­low 4 per­cent in the past five years. That means they would have to ac­cept a higher rate to buy a new home. Plenty of home­own­ers are choos­ing to re­model their cur­rent homes in­stead.

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