Home Prices Cool In 2nd Quarter

Home prices cooled late in the second quarter but began to pick up in July based on FHFA's house price index which rose a higher-than-expected 0.6 percent with the year-on-year rate at plus 5.8 percent. This is the largest monthly gain since February this year and the largest year-on-year gain since April last year.

The strongest gains were in the West led by the Mountain region at 1.6 percent in the month. Only two of nine regions declined in the month with New England at a steep minus 1.2 percent. Year-on-year, Mountain is out in front at a very strong plus 9.4 percent with New England bringing up the tail end but still in positive ground at plus 2.1 percent.

Case-Shiller won't be released until next week but today's report should raise expectations for strength. For the housing outlook, this report helps offset weakness in yesterday's existing home sales report. New home sales will be posted on Thursday.

Recent History Of This Indicator:
Home sales have been respectable but indications on home prices have been soft. Following an undersized 0.2 percent rise in June, forecasters see a respectable 0.4 percent gain in July for the FHFA house price index.