U.S. house prices rose 0.3 percent in August from July, the smallest gain in 11 months, as more homeowners listed their properties, according to the Federal Housing Finance Agency.
The seasonally adjusted increase was less than the 0.8 percent average estimate of 15 economists, data compiled by Bloomberg show. Prices climbed 8.5 percent from a year earlier, the FHFA said today in a report from Washington.
Competition for a limited supply of available homes has been fueling price gains across the U.S. The increases will slow as higher values draw more sellers to the market, adding to the inventory, according to Paul Diggle, property economist at Capital Economics Ltd. Prices will rise 8 percent this year and 4 percent in 2014, the firm projected.
“Supply is loosening, and clearly that is why it’s going to be a slowdown,” Diggle said by telephone from London. “A lot of people delayed selling at the bottom of the market. As prices rise more, people are in the position to sell.”
There were 2.21 million existing homes for sale at the end of last month, up from 2.17 million in September 2012, according to the National Association of Realtors. It was the first time inventory increased on an annual basis since early 2011, the group said.
Price increases and a jump in borrowing costs from near-record lows have put real estate out of reach for some would-be buyers. The average rate for a 30-year fixed mortgage was 4.28 last week, up from 3.35 percent in early May, according to Freddie Mac.
Home affordability was at an almost five-year low in September, with the median price up 11.7 percent from a year earlier, the Realtors group said this week. Sales of existing houses dropped 1.9 percent to a 5.29 million annual rate, down from a revised 5.39 million pace in August that was the strongest since 2009, the group said.
The FHFA’s report showed prices increased 1.3 percent from July in the Mountain region, which includes Nevada and Arizona. In the West North Central region, with Minnesota and Nebraska, the gain was 1.2 percent. Prices fell 0.5 percent in the South Atlantic area, including Georgia and Florida.
The FHFA index measures transactions for single-family properties financed with mortgages owned or securitized by Fannie Mae and Freddie Mac. It doesn’t provide a specific price for homes.