U.S. home prices are continuing to lose steam.
In August, annual home-price gains slid below 6 percent for the first time in a year, according to the S&P CoreLogic Case-Shiller Index. The index, which measures average home prices in major metro areas, reported a 5.8 percent year-over-year gain, compared with 6 percent in July.
The latest data comes as rising prices in recent years have made homes the least affordable in a decade. Additionally, rising interest rates have made borrowing more expensive for prospective homeowners. As a result, home sales have declined.
“Following reports that home sales are flat to down, price gains are beginning to moderate,” said David Blitzer, managing director and chairman of the Index Committee at S&P Dow Jones Indices. “Rising prices may be pricing some potential home buyers out of the market, especially when combined with mortgage rates approaching 5 percent for 30-year fixed-rate loans.”
Compared to a year earlier, 14 of the 20 cities showed slower price growth. The highest year-over-year gains were in Las Vegas, San Francisco and Seattle — where prices ticked up 13.9 percent, 10.6 percent and 9.6 percent, respectively.
Markets including Chicago and New York fell below the national level with less than 3 percent growth. On the other hand, Los Angeles saw 6.2 percent while Miami reported 5 percent.
Rising prices and constrained inventory have also put a damper on U.S. home sales. Seasonally adjusted sales of new homes fell for the fourth straight month in September. Sales dipped 5.5 percent in September from August and 13.2 percent year over year.