US home prices rise at slowest pace in nearly a year

Las Vegas, Seattle and San Francisco reported the biggest annual gains, with all three cities seeing double-digit increases. Yet in 15 of 20 cities, price gains were smaller in July than in the same month a year earlier.

The combination of rising home prices and higher mortgage rates has made homes less affordable, even as a strong job market and some signs of higher pay have lifted demand.

The average 30-year mortgage rate rose to 4.65 per cent last week, according to mortgage giant Freddie Mac. That is up from 3.83 per cent a year ago.

Any rate below 5 per cent is very low by historical standards, but many homeowners locked in rates below 4 per cent in the past five years. That means they would have to accept a higher rate to buy a new home. Plenty of homeowners are choosing to remodel their current homes instead.

Home prices in 12 of the 20 cities in the Case-Shiller index have rebounded from the housing slump and have reached new heights. Four of the cities that are still below their housing bubble peaks are seeing strong price gains: Las Vegas, Miami, Phoenix and Tampa. The other four are seeing modest increases: Washington, D.C., Chicago, New York and Detroit.

The number of homes for sale remains limited, which has sparked bidding wars in many cities. However, the supply crunch may be easing: There were 1.92 million homes for sale at the end of August, up from just 1.87 million a year ago.

Christopher Rugaber, The Associated Press

by Canadian Press

US home prices rise at slowest pace in nearly a year

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