US home prices rise at slow pace for 2nd straight month

Business

In this April 13, 2019, photo, shows an aerial view of homes, in suburban Salt Lake City. On Tuesday, Oct. 29, the Standard & Poor’s/Case-Shiller 20-city home price index for August is released. (AP Photo/Rick Bowmer)

WASHINGTON (AP) — U.S. home prices increased modestly in August, a trend that could make home buying affordable for more Americans.

The S&P CoreLogic Case-Shiller 20-city home price index, released Tuesday, rose 2% in August from a year earlier. That matched July’s annual increase as the slowest in seven years. Wages have been increasing more quickly than home prices since February, reversing a yearslong trend.

Slower price gains combined with low mortgage rates have helped the housing market revive this year after a slump in 2018. Steady hiring and an unemployment rate at a 50-year have also forced companies to offer higher pay, making it easier for more people to afford house payments. And the average rate on a 30-year mortgage was 3.75% last week, down sharply from 4.86% a year earlier.

Sales of existing homes have increased 3.9% in the past year, while sales of new homes have soared 15.5% compared with a year earlier.

As many once-hot Western markets cool off, cities in the Southeast are starting to see the nation’s fastest price gains. Phoenix reported the biggest increase, with prices rising 6.3% from a year ago. But Charlotte saw the next highest gain, at 4.5%, followed by Tampa at 4.3% and Atlanta with 4%.

Home prices in Seattle barely rose, increasing just 0.7% from a year ago, while they slipped 0.1% in San Francisco.

The supply of available homes remains low, with builders complaining about a lack of available land and shortage of construction workers.

Those trends have pushed up the cost of lower-priced homes more quickly than more expensive ones in many cities. In Tampa, for example, homes priced below $195,000 have seen prices rise by nearly double digits in the past year, while the highest-priced homes, above $284,000, have seen price gains at less than half that pace, according to the Case-Shiller data.

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