Home prices continue to rise but the pace of growth has slowed. Yesterday the Case-Shiller 20-city composite index was released and showed US home prices rising 1.1% in May, and 9.3% for the last 12 months. This particular index is designed to track the value of single-family residences.
In the chart below, we can see that home prices were increasing at their fastest post-recession rate near the beginning of 2014. Since then growth has been slowing, but remains positive. There is a lag between interest rate movements and their effect on the housing market. So far in 2014, rates have moved one direction -- down. In theory this should be good for home prices, but the benefit of lower rates takes time to move through the system. Typically mortgage applications begin to rise first, then we see increases in pending sales figures, and finally home prices.
According to the Mortgage Bankers Association, purchase ... Log in or subscribe to continue reading.
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