Despite continued signs of moderation in home price appreciation, the latest FNC Residential Price Index (RPI) shows that U.S. home prices were up another 0.8 percent from May to June and 2.3 percent throughout the second quarter. Constructed to gauge the price movement among normal home sales by excluding distressed properties, the index’s year-over-year growth continues to decelerate as widely expected: down to 8.0 percent from its fastest acceleration of 9.4 percent in February 2014.
Encouraging job growth and favorable mortgage rates have contributed to a rising demand for housing. July home prices are expected to continue to trend upward. As mortgage defaults and foreclosure starts continue to fall to record lows, foreclosure sales as of July have dropped to 10.5% of total existing home sales—the lowest rate since October 2007. Conditions in the for-sale markets continue to be favorable: July’s asking price discount averages only about 2.0 percent and median time-on-market, 90 days.
On a year-over-year basis, nearly a dozen cities, led again by Sacramento, Riverside, and Miami, continue to show double-digit price gains amid a notable slowdown in the annual rate of price appreciation across much of the country. The Cincinnati, St. Louis, and Cleveland markets largely remain an outlier and their latest numbers (from June) continue to point to weakening prices year over year.