What to watch
Moderate price gains make home buys easier
U.S. home price gains have been moderating. And that’s a good thing.
Annual jumps in home values had accelerated for 11 consecutive months, cheering owners but squeezing out low- and moderate-income buyers.
Since February, the year-overyear gain in the S&P CoreLogic Case-Shiller national home price index has been flat or falling for five months in a row. In June, the most recent data available, prices were up 5.1% from a year ago.
That still challenges middle-income households whose wages haven’t kept up with home price appreciation, says Ralph McLaughlin, chief economist of real estate research firm Trulia. But the moderating gains at least give such Americans a better chance of affording a home.
The hottest markets are still sizzling, with annual price gains in June of 12.6% in Portland, Ore., 11% in Seattle and 9.2% in Denver.
But San Francisco has cooled off considerably. Average prices there were up 6.4% from a year ago, down from 11.1% in November and the smallest annual increase since August 2012.
Of course, price gains also need to be strong enough to prompt homeowners to put their units on the market. That doesn’t seem to be a problem for now.
“Home prices may be settling into a more stable equilibrium,” Nomura economist Lewis Alexander says. He believes the latest S&P report for July, out Tuesday, will show a further modest slowdown in home price increases.