Home Prices Rose 0.3% in August on Jobs Growth: FHFA

Home prices rose in August as low borrowing costs and sustained job growth fueled demand amid a tight inventory of properties on the market.

Prices climbed 0.3% on a seasonally adjusted basis from July, the Federal Housing Finance Agency said Thursday in a report from Washington. The average estimate of 16 economists was for a 0.5% increase, according to data compiled by Bloomberg. The gain was 5.5% from a year earlier.

Values have increased steadily as buyers, bolstered by an improving job market and easing mortgage standards, compete for a limited supply of existing homes. The number of listed properties in August was the second-lowest for that month since 2002, according to the National Association of Realtors.

"House prices have been rising at a fairly slow rate for the past year and a half, and that's an unusually steady spell," Andres Carbacho-Burgos, senior economist with Moody’s Analytics Inc., said Wednesday in a telephone interview. "That's relatively good because it indicates that demand for homes is starting to expand."

The FHFA's index is 0.9% below its March 2007 peak and about the same as the December 2006 level.

Prices increased from a year earlier in all regions, led by the Pacific area (California, Oregon and Washington) at 7.4%. The Middle Atlantic region (New York, New Jersey and Pennsylvania) had the smallest gain, 2.2%.

The gauge measures transactions for single-family properties financed with mortgages owned or securitized by Fannie Mae and Freddie Mac. It doesn't provide specific prices. The median price of an existing single-family home was $230,200 in August, according to the Realtors group.