U.S. Home Prices Climbed 0.1% in July as Gains SlowedPrashant Gopal
U.S. home prices rose less than economists estimated in July as investors pull back from the property market.
Prices climbed 0.1 percent on a seasonally adjusted basis from June, the Federal Housing Finance Agency said today in a report from Washington. The average economist estimate was for a 0.5 percent increase, according to data compiled by Bloomberg.
Investors who helped drive up prices are retreating as fewer foreclosures and other discounted homes become available. All-cash purchases in August fell to about 23 percent of the market from the usual 33 percent, the National Association of Realtors reported yesterday. Investors accounted for 12 percent, the least since late 2009.
“There are fewer investors because the incentive isn’t there any more,” Patrick Newport, an economist with IHS Global Insight in Lexington, Massachusetts, said in an interview yesterday. “They buy low and sell high and right now there aren’t a lot of properties selling at low prices.”
Sales of previously owned U.S. houses dropped 1.8 percent in August to a 5.05 million annual pace, according to the Realtors group.
The gain in the FHFA index was smaller than in June, when prices rose 0.3 percent from May.
The FHFA’s report showed prices in July climbed 0.4 percent in New England, which includes Massachusetts and Connecticut; and in the East North Central region, with states such as North Dakota and Minnesota. Prices fell 0.5 percent in the the Middle Atlantic area, including New York, New Jersey and Pennsylvania.
Nationwide, prices rose 4.4 percent in July from a year earlier. The U.S. index is 6.4 percent below its April 2007 peak and about the same as the July 2005 level.
The FHFA index measures transactions for single-family properties financed with mortgages owned or securitized by Fannie Mae and Freddie Mac.