- Price increases in August were below the gains in July
- Home-price growth is showing signs of strain, analyst says
Home-price gains in the US slowed in August as high borrowing costs weighed on potential buyers.
A national measure of prices rose 4.2% from a year earlier, according to data from S&P CoreLogic Case-Shiller. That was smaller than the 4.8% increase in July.
The index for August tracks a three-month period starting in June, when the average rate on a 30-year mortgage hovered above 6.8%. Borrowing costs later eased, but have started ticking up in recent weeks.
High mortgage rates are weighing on the housing market. Closed sales of previously owned homes were down to a 10-month low in August and fell further in September, according to the National Association of Realtors.
“Home-price growth is beginning to show signs of strain, recording the slowest annual gain since mortgage rates peaked in 2023,” Brian Luke, head of commodities, real and digital assets at S&P Dow Jones Indices, said in a statement Tuesday.
The Federal Reserve cut its benchmark interest rate in September. Investors have been speculating about the size of any future cut by the central bank given strong economic data in recent weeks.
In August, a measure of prices in 20 cities rose 5.2% from a year earlier, compared with a 5.9% annual gain in July, the S&P CoreLogic Case-Shiller data show. New York had the biggest increase with an 8.1% climb in prices, followed by Las Vegas and Chicago.
Written by: Alex Perry @Bloomberg
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