Housing prices rise at slower rate

WASHINGTON – U.S. home prices in June posted another month of fast growth, though the data signal some moderation, according to a report released Tuesday.

With gains in cities across the country, U.S. home prices increased 2.2 percent in June, a strong result but down from 2.5 percent in May, according to the S&P/Case-Shiller gauge.

In six cities, prices rose faster in June than they did in May. In May, 10 cities had posted faster monthly growth.

Annual home-price growth for the 20-city composite hit 12.1 percent in June, down from 12.2 percent in May, when prices hit the fastest year-over-year pace since 2006.

“Overall, the report shows that housing prices are rising but the pace may be slowing,” said David Blitzer, chairman of the index committee at S&P Dow Jones Indices. “With interest rates rising to almost 4.6 percent, home buyers may be discouraged and sharp increases may be dampened.”

Pent-up demand and constrained supply have supported price gains, a trend that is likely to continue but may moderate, given rising interest rates and a slowly growing economy, economists said.

“This report is largely consistent with the positive tone in housing market activity during the first half of the year, and the deceleration in the pace of appreciation reflects in part the slowing in sales momentum,” said Millan Mulraine, U.S. research and strategy director for TD Securities.