Home prices increased more than estimated in July as the job market improved and buyers competed for a tight supply of properties.
Prices climbed 0.6% on a seasonally adjusted basis from June, the Federal Housing Finance Agency said in a report from Washington Tuesday. The average estimate of 23 economists was for a 0.4% increase, according to data compiled by Bloomberg. The gain was 5.8% from a year earlier.
The declining unemployment rate has helped create a bigger pool of buyers, who've been finding few homes on the market to pick from. Listings nationwide fell 4.7% in July from a year earlier, according to the National Association of Realtors. Price increases will encourage more homeowners to sell as they gain enough equity to trade up.
"The key thing that has been pushing up prices higher was diminished availability of homes," said Millan Mulraine, deputy head of U.S. research and strategy at TD Securities USA in New York. "And that should begin easing in the coming months as more homes are put on the market."
The FHFA's index is 1.1% below its March 2007 peak and about the same as the November 2006 level.
The annual price increase was bigger than in July 2014, when prices rose 4.8% on a year-over-year basis. Gains accelerated in every region, other than New England.
Prices climbed 9.4% from a year earlier in the Mountain region, which includes Colorado, Arizona and Nevada, and 8.1% in the Pacific, with states such as California, Oregon and Washington. The New England area — which includes Connecticut, New Hampshire and Massachusetts — had the smallest increase, at 2.1%.
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 $235,500 in July, up 5.8% from a year earlier, according to the National Association of Realtors.
