WASHINGTON (9/24/14)--The recent uptick in home prices decelerated in July, according to a government report released Tuesday in Washington.
A Federal Housing Finance Agency (FHFA) index measuring the value of homes climbed by a monthly rate of 0.1% to 212.7, down from a 0.3% jump in June. The increase brought growth over the 12 months since July 2013 to 4.4%.
The tepid increase is another data point that shows the housing recovery is slowing, according to Moody's analysts (Economy.com Sept. 23). The monthly uptick was only enough to make up for a downward revision in the June data.
Home sales also slowed in August by 1.8%, according to a report released Monday by the National Association of Realtors (News Now Sept. 23). The FHFA index, which is based on homes insured by public sector mortgage underwriters Fannie Mae and Freddie Mac, is down 6.4% from its April 2007 peak, although it has increased by 17% over the past three years.
Moody's analysts said that housing demand and the growth of home values should pick up, with job growth robust, housing relatively affordable, and the post-baby boomer generation reaching its peak earning years.
Prices for existing single-family homes could also fall, they warned, with construction starts on the rise.
Analysts for the ratings and research firm also cautioned that some forecasts are predicting future downward pressure on housing affordability, with mortgage rates expected to increase.
The monthly increase largely occurred across the nation. Seven out of nine census divisions saw home values appreciate between June and July, with the only exceptions occurring in the Mid-Atlantic and Mountain divisions.
All nine census divisions saw annual increases in July ranging from 1.6% in the Mid-Atlantic to 7.2% in the Pacific.