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Moderation seen in housing price recovery, reports note
WASHINGTON (8/27/14)--The increase in home prices has slowed, leading to a moderate housing market, according to numbers released Tuesday.
The S&P/Case-Shiller Index reported a slowdown in U.S. home prices year-over-year. June's 1% increase in the 20-city composite index pushed the annual price growth to 8.1%, the slimmest year-over-year result since January 2013 (MarketWatch Aug. 26).
Heavy demand from investors has slowed, and traditional mortgage-based homebuyers have yet to re-enter the market in full force, noted Moody's analysts ( Aug. 26).
Slower home-price growth, along with reports of a positive outlook among homebuilders, is a good sign of a more normal housing sector, David Blitzer, index committee chairman at S&P Dow Jones Indices, told MarketWatch.
Meanwhile, the Federal Housing Finance Agency (FHFA) announced that U.S. house prices rose 0.8% in the second quarter, according to its purchase-only, seasonally adjusted House Price Index (HPI). This is the 12th consecutive quarterly price increase in the HPI.
FHFA calculates HPI with home sales price information from mortgages sold to or guaranteed by Fannie Mae and Freddie Mac. Compared with the second quarter of last year, house prices rose 5.2%, and FHFA's seasonally adjusted monthly index for June was up 0.4% from May, marking seven consecutive monthly increases.
"The extraordinary price appreciation observed over the last few spring seasons was not evident in the second quarter of this year. However, house price appreciation for the nation as a whole remained positive," said FHFA Principal Economist Andrew Leventis. "FHFA's data indicate that house price appreciation in the quarter was near or below the baseline rate of inflation in most states."
Only 14 states are recording year-over-year growth above the national average of 5.2%, while 20 states are experiencing less than 3% appreciation. Most of the markets that are outperforming are the ones that suffered the most from the housing bubble such as Nevada, California, Arizona, Florida, Georgia and Michigan, said analysts from Moody's ( Aug. 26).


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