US home prices rise in June at slowest pace in 10 months

“June represents the fifth straight month of flat or decreasing year-over-year price gains, but homebuyers are still being challenged as prices outpace income growth,” Ralph McLaughlin, chief economist at real estate data provider Trulia, said.

Home prices in the Northwest continued to climb at a double-digit pace. They rose 12.6 per cent in Portland, 11 per cent in Seattle, and 9.2 per cent in Denver. Those three cities have topped the list of price gains for the past five months.

Yet those cities are increasingly outliers. Price gains in the Midwest were mixed. Home prices in Cleveland and Chicago rose just 2.5 per cent and 3.3 per cent, respectively, while in Minneapolis they climbed a faster 5.1 per cent.

Southern cities saw stronger price gains. They rose 8.9 per cent in Dallas, 7.9 per cent in Tampa, and 5.8 per cent in Atlanta.

The 20-city price index plunged after the housing bubble started to burst in 2006, plummeting by more than a third before prices began to rise again in March 2012. In June, they were still 8.1 per cent below their peak level.

That suggests there are still many homeowners who bought near the peak and have little equity in their homes. Or they remain underwater, owing more on their mortgages than their homes are worth. In either case it is difficult for them to sell.

The number of homes for sale has fallen 5.8 per cent from a year ago, leaving would-be buyers with fewer choices, according to the National Association of Realtors.

That may have hobbled sales in July. Purchases of existing homes fell 3.2 per cent that month to a seasonally adjusted annual rate of 5.39 million. Still, that decline came after sales reached their highest level in more than nine years in June.

Low mortgage rates are pushing in the other direction by making home purchases more affordable. The average rate on a 30-year fixed mortgage was 3.43 per cent last week, according to mortgage giant Freddie Mac, not far from its record low.

The Case-Shiller index covers roughly half of U.S. homes. The index measures prices compared with those in January 2000 and creates a three-month moving average. The June figures are the latest available.

Christopher S. Rugaber, The Associated Press

by Canadian Press

US home prices rise in June at slowest pace in 10 months

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