Us house prices rises continue to cool

Photo credit: Cyndie

Annual US house price growth is now at its slowest pace since 2012, according to the latest quarterly report by the National Association of Realtors.

The median existing single-family home price increased in 71 per cent of measured markets, with 122 out of 173 metropolitan statistical areas showing year-on-year gains based on closings. Forty-seven areas (27 percent) recorded lower median prices from a year earlier.

There were fewer rising markets in the second quarter compared to the first quarter, when price increases were recorded in 74 per cent of metro areas. Furthermore, 19 areas in the second quarter (11 per cent) had double-digit increases, a sharp decrease from the 37 areas last quarter.

The national median existing single-family home price in the second quarter was $212,400, up 4.4 percent from the second quarter of 2013 ($203,400). The median price during the first quarter of 2014 rose 8.3 percent from a year earlier.

While the slowdown may appear negative following such a rapid period of recovery, though, Lawrence Yun, NAR chief economist, says that the balancing out is to the benefit of both buyers and sellers:

"National median home prices began their most recent rise during the first quarter of 2012 but had climbed to unsustainable levels given the current pace of inflation and wage growth. At this slower but healthier rate, homeowners can continue steadily building equity. Meanwhile, for buyers, increased supply with moderate price gains is giving them better opportunities to choose."

Yun adds that despite the stabilization in price growth, sharp increases still exist in some markets and are impacting sales, notably on the West Coast where inventory shortages are more prevalent.

NAR President Steve Brown adds that even with the increase in supply, Realtors across the country are reporting that properties are selling faster than earlier in the year, thanks to improving economic conditions and low interest rates.