While sale prices of U.S. homes increased in June, they rose at a slightly slower pace than in the previous month.
Property values in 20 U.S. cities increased 12.1 percent in June over the same month in 2012, a cool from May’s 12.2 percent increase, the biggest gain in the S&P/Case-Shiller index of property values since March 2006.
Still, all 20 cities in the index showed a year-over-year increase, led by a 24.9 percent gain in Las Vegas and 24.5 percent in San Francisco. New York had the smallest lift, at 3.3 percent year-over-year.
The “rate of growth of home prices is certainly slowing, but we’re still posting respectable year-over-year increases,” Brian Jones, a senior U.S. economist at Societe Generale in New York, told Bloomberg News. “Housing’s in good shape. We’re always going to keep one eye on mortgage rates to see if there is an appreciable impact going forward.”
While upward-bound property values are lifting overall household wealth and boosting consumer spending, rising mortgage rates are putting a damper on sales and refinancing.
“Housing prices are rising but the pace may be slowing,” David Blitzer, chairman of the S&P index committee, said in a statement. “With interest rates rising to almost 4.6 percent, home buyers may be discouraged and sharp increases may be dampened.” [Bloomberg News] — Julie Strickland