U.S. home prices declined in August for first time in a year

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Home prices in 20 U.S. cities declined in August from the prior month for the first time in a year, reflecting moderation in some once-hot real estate markets.

The S&P CoreLogic Case-Shiller index of property values fell 0.2% during the month, compared with estimates for a 0.1% decline, after no change in July, according to data Tuesday. Prices increased 2% from August 2018, matching the year-over-year gain in the prior month but slightly below the median estimate of economists in a Bloomberg survey. Nationally, annual home prices were up 3.2% after a 3.1% increase in July.

Although mortgage rates are hovering near a three-year low, tepid wage gains are limiting buyer enthusiasm in markets such as Las Vegas and New York. Meanwhile, a shortage of affordable inventory is keeping prices elevated.

Price gains may firm in the coming months amid recent signs of strength across the sector. The median sales price for previously owned homes saw the biggest annual gain since January 2018 last month as new home sales steadied, according to separate reports recently.

Phoenix, Miami, Seattle and Tampa led price gains in August from a month earlier.

All 20 cities in the index, with the exception of San Francisco, showed year-over-year gains. Prices there fell 0.1% from August 2018.

Prices in 17 cities rose from the prior month on a seasonally adjusted basis. In New York, home prices fell 0.4% from July, while in Las Vegas, they dropped 0.1%. In Detroit, prices were unchanged month over month.

Bloomberg News
Home prices Housing market Purchase Housing inventory Housing affordability S&P CoreLogic