Home Prices Continue To Moderate

Indications on home prices continue to moderate, the latest being a subdued 0.2 percent increase in the FHFA house price index for June. Year-on-year, the rate is 6.5 percent which is down from an upward revised 6.7 percent in May. This rate had been approaching 8 percent early in the year.

The weakest appreciation is in the West South Central census region which posted only a 0.1 percent monthly gain and a yearly rate of 5.1 percent. The Mountain region is the strongest, jumping 0.7 percent in the month for a year-on-year gain of 9.6 percent.

Levels in this report remain quite favorable though the recent direction is not, perhaps reflecting less favorable mortgage rates and a general lack of interest in home ownership that has been evident since the subprime housing meltdown 10 years ago. Yesterday's existing home sales report likewise showed moderation in price data. Watch later this morning for the new home sales report where prices in the last report were in outright contraction.