Home prices continue trend by cooling down in August

New homes are under construction in the Kingstowne area of Fairfax, Virginia. Home prices are rising but the growth has slowed in recent m...

New homes are under construction in the Kingstowne area of Fairfax, Virginia. Home prices are rising but the growth has slowed in recent months. Photo by Roger Wollenberg/UPI

By Nicholas Sakelaris, UPI

Home prices are still going up but not nearly as much they were earlier this year, a side effect of rising interest rates and property values, a CoreLogic Case-Shiller study revealed Tuesday.

Home prices increased by 5.8 percent year over year, the slowest rate since mid-2017 and the fifth straight month that annual price gains decreased.

Prices rose by 6 percent in July and 6.2 percent in June.

"Price gains are still in place across every market we look at. We're in no means in a declining environment," Craig Lazzara, managing director and global head of index investment strategy for S&P Dow Jones Indices, told NBC News. "The slowdown is a positive, relative to the continued acceleration in terms of affordability. On the other hand, prices are still up."

Purchases of previously owned homes fell in September to the slowest rate in three years. Sales of new homes fell to the lowest in nearly two years.

The greatest increases among the 20 cities were found in Las Vegas, with a 13.9 percent rate, San Francisco, with a 10.6 percent rate, and Seattle, with a 9.6 percent rate. Seattle still had less growth from the previous August when prices rose 12.1 percent.

Mortgage rates are near a seven-year high.

This doesn't mean the housing market will crash like it did a decade ago.

"Following reports that home sales are flat to do, price gains are beginning to moderate," David Blitzer, chairman of the S&P index committee, said in a statement. "There are no signs that the current weakness will become a repeat of the crisis, however."

Today's market is much more stable, Lazzara said.
"People always worry, is this a precursor to a repeat of what happened in 2007 and 2008? There are absolutely no signs of that," he said. "It's a broad-based recovery. It's continuing, it's just not as fast as it has been in the recent past."