U.S. house prices rose 1.2 percent in the second quarter of 2016 compared with the first quarter, while the rising momentum was cooling as the houses become more unaffordable.
According to the Federal Housing Finance Agency (FHFA) House Price Index released on Wednesday, the house prices in the second quarter of this year increased 5.6 percent compared with the same period of 2015. "Although the appreciation rate for the second quarter was of similar magnitude to what we've been seeing for several years now, a close look at the month-over-month price changes during the quarter reveals a potentially significant market shift," said Andrew Leventis, FHFA supervisory economist.
U.S. house prices in June only increased 0.2 percent on a seasonally adjusted basis from May, the third straight 0.2 percent monthly increase, said the FHFA. "This is a much more modest pace of appreciation than we've seen in some time and most likely reflects accumulated pressures from significantly reduced home affordability," said Leventis.
Tight inventory and rising prices have narrowed the affordability of houses to U.S. home buyers, which made the existing home sales fall in July after rising for four months, said the National Association of Realtors (NAR) on Wednesday.
For the nine census divisions, four divisions have witnessed price up in June compared with May, one division kept the same, while the other four fell. House prices in the Pacific division including Hawaii, Alaska, Washington, Oregon and California, fell the most by 0.4 percent compared with May, the FHFA said.
On an annual basis, house prices in all nine census divisions increased, as prices of the Mountain division, including Montana, Idaho, Wyoming, Nevada, Arizona, New Mexico, Utah and Colorado, climbed the most in June by 8.6 percent.
The FHFA measured changes in real estate values using purchases of properties with mortgages backed by Fannie Mae or Freddie Mac. It did not provide a specific price for houses.
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