U.S. home prices increased 1.2% on a seasonally adjusted basis in the second quarter compared with the first quarter and increased 5.6% compared with the second quarter of 2015, according to the Federal Housing Finance Agency’s (FHFA) home price index.
However, home price appreciation is showing some signs of deceleration, as prices increased only 0.2%, on average, in June compared with May.
“Although the appreciation rate for the second quarter was of similar magnitude to what we’ve been seeing for several years now, a close look at the month-over-month price changes during the quarter reveals a potentially significant market shift,” says Andrew Leventis, supervisory economist for the FHFA, in a release. “Our monthly price index indicates that in each of the three months of the quarter, the increase was only 0.2 percent. This is a much more modest pace of appreciation than we’ve seen in some time and most likely reflects accumulated pressures from significantly reduced home affordability.”
From the end of the second quarter of 2015 to the end of the second quarter of 2016, home prices increased in every state except Vermont, according to the report. States that saw the most home price appreciation during that 12-month period include Oregon (11.7%), Washington (10.3%), Colorado (10.2%), Florida (10.0%) and Nevada (9.6%).
Of the nine census divisions, the Mountain division experienced the strongest home price appreciation during the second quarter, posting a 1.9% increase compared with the first quarter and an 8.1% increase compared with the second quarter of last year.
Home price appreciation was weakest in the Middle Atlantic division, where prices rose only 0.6% compared with the first quarter.