U.S. home prices increased 0.8% in June compared to May and were up 2.3% in the second quarter compared to the first quarter, according to FNC's Residential Price Index, which tracks home prices in the top 100 metropolitan areas using a proprietary formula.
The index, which excludes distressed sales, shows that the rate of home price appreciation continued to decrease, on a year-over-year basis, in June. Home prices were up 8% compared to June 2013. However, by comparison, they were up 9.4% in February compared to February 2013.
FNC forecasts that despite the slowdown, home price appreciation will continue to gradually rise for the remainder of this year, driven mainly by increased job growth and favorable mortgage rates.
The report shows that mortgage defaults and foreclosure starts continue to fall to record lows. Foreclosure sales as of July had dropped to 10.5% of total existing home sales – the lowest rate since October 2007. Conditions in the for-sale markets continue to be favorable: July's asking price discount averaged only about 2% and the median time-on-market was about 90 days.
Sacramento, Calif.; New York City and Charlotte, N.C., saw the largest month-over-month price gains in June at 1.9%, 1.7% and 1.7% respectively. This was the second consecutive month that Sacramento and Charlotte saw a sizeable month-over-month price increases, according to the report.
Cities that saw the biggest month-over-month decreases in home prices in June were Washington D.C.; Phoenix; San Antonio; and St. Louis.
Quarter over quarter, Sacramento; Charlotte; Riverside, Calif.; and Miami saw the biggest gains in home prices, with increases of more than 5%, compared to the first quarter.
Year over year, nearly a dozen cities, led again by Sacramento, Riverside and Miami, continued to show double-digit price gains in June, amid a notable slowdown in the annual rate of price appreciation across much of the country. The Cincinnati, St. Louis, and Cleveland markets largely remained outliers – the June numbers for these cities indicate weakening prices, year over year.