Dive Brief:
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U.S. home prices increased 0.5% on a seasonally adjusted basis in July after an upward-revised June uptick of 0.3%, according to the Federal Housing Finance Agency. Prices were up 5.8% from July 2015.
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The FHFA House Price Index for July was 236.1, a slight rise from its June reading of 235.0 and up 13 points from July 2015.
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FHFA home prices and the HPI are based on Fannie Mae and Freddie Mac mortgage data. The HPI measures the average price changes in repeat sales or refinancing on the same properties.
Dive Insight:
All of the regional census divisions tracked by the FHFA showed month-to-month increases from June 2016, as well as from July 2015, indicating economic growth nationwide.
The latest CoreLogic Home Price Index report, which also included distressed sales, indicated that home prices were up 1.1% in July and up 6% on an annual basis. When excluding distressed sales, the CoreLogic's monthly index was still a half-point higher than what the FHFA reported. Zillow's July Home Value also showed a bump in year-over-year home prices with a 5.1% increase.
There's little doubt that limited inventory continues to play a significant role in home-price increases. First-time buyers have been especially affected, with entry-level inventory dropping almost 11% in the third quarter from the same period in 2015, with overall U.S. inventory down almost 7%, Trulia reported. And the persistent state of low housing stock is making homes less affordable, thereby preventing potential homeowners from taking advantage of record-low mortgage rates, according to National Association of Realtors Chief Economist Lawrence Yun.
However, Trulia reported earlier this month that 21 of the country's 100 largest metros had begun to add inventory, among them Miami (33.1%) and San Francisco (19.3%). As inventory grows, home prices will begin to drop. Already, according to the most recent S&P Core Logic Case-Shiller report, price growth has slowed slightly. Even still, home prices are continuing to climb, making houses, particularly in already-pricey markets, further out of the reach of many buyers.