Annual growth in U.S. home prices accelerated for the second consecutive month in July, indicating that the market’s price decline may be bottoming out, according to a report released Tuesday.
House prices rose 4.6% year-on-year in July, up from a revised 3.2% the previous month. June marked the first acceleration in annual price growth since February 2022, the Federal Housing Finance Agency (FHFA) said.
The report also showed that prices rose moderately on a month-on-month basis, in line with the trend of the last quarter. Prices gained 0.8% in July, compared with a revised 0.4% month-on-month increase in the previous month.
The Federal Reserve’s interest rate hikes, which began in March 2022, have raised mortgage borrowing costs and deterred homeowners from selling their homes, exacerbating inventory shortages in the housing market and helping to keep the highest prices.
The average weekly rate on a 30-year fixed mortgage has remained above 7% since August, at the highest levels since 2002.
“Regionally, all nine census divisions recorded positive price appreciation over the past 12 months, although the Pacific and Mountain divisions experienced only modest growth,” said Nataliya Polkovnichenko, FHFA supervising economist.