Home prices grew more quickly in August, a sign that lower mortgage rates are providing a bit of a lift to the housing market.
Average national home prices grew 3.2% in the year ending in August, according to the S&P CoreLogic Case-Shiller National Home Price Index, up slightly from 3.1% the prior month.
After a weak start to the year the housing market gained some momentum in the summer but it is unclear if that will prove sustainable. The pace of existing home sales accelerated in July and August only to fall back in September, the National Association of Realtors reported last week.
Average rates for a 30-year mortgage fell to 3.75% last week after hitting nearly 5% last November, according to Freddie Mac. But low mortgage rates aren’t boosting the housing market as some economists expected, in part because they say homes are so expensive buyers are still struggling to afford them.
Home prices are still growing roughly half as quickly as they were a year ago. The regional picture is also mixed, with more affordable cities continuing to see strong price growth but expensive coastal cities struggling. More than half of the 20 metropolitan areas in the Case-Shiller index reported slower home-price growth in August than in July.
Price growth remains strongest in some of the more affordable markets in the country. Phoenix led the country with a 6.3% annual home-price increase, followed by Charlotte, N.C., with a 4.5% increase and Tampa at 4.3%.
Meanwhile, prices on the West Coast remain stagnant. Prices grew just 0.7% in Seattle compared with a year earlier, after three consecutive months of falling prices. San Francisco was the only metropolitan area to see prices fall in August, with a 0.1% decline compared with a year earlier.