U.S. home prices continued to increase during the three-month period ended in June, according to FNC's residential price index.
According to the firm, home prices increased about 1.2% in June compared to May. What's more, home prices increased 3.5% in the second quarter compared to the first quarter.
Rising home sales and steady economic growth are what contributed to the increase in home prices during the past quarter.
‘The second quarter marks the strongest seasonal price momentum since spring 2005,’ says Bob Dorsey, chief data and analytics officer for FNC. ‘It outpaced the same period in 2013 when the housing market was rebounding very strongly.’
‘Housing has been, for a while, one of the bright spots in the broad economic growth,’ Dorsey adds. ‘However, the momentum cannot sustain on its own without a strong, robust labor market, which is even all the more important with respect to policies designed to encourage first-time home buyers.’
As of June, distressed sales represented about 9.7% of all home sales. It was the first time since 2007 that distressed sales fell below 10%.
The average time on market in June was 89 days compared to 97 days in May.
The average asking-price discount was 2.8%, down from 3.2% in May.
Due to tight inventory, FNC predicts that the average time on market and asking price discount will both continue to decrease in July.
Cities that saw the biggest increases in home prices in June compared to May included San Francisco (3.4%), New York (3.2%), Chicago (3.0%), Houston (2.7%) and Minneapolis (2.2%).
Cities that saw the biggest increases in June compared to June 2014 included Dallas (14.7%); Las Vegas (14.3%); Orlando, Fla. (13.4%); Portland, Ore. (11.3%); and Atlanta (10.7%).
The three-month rolling index shows that although most markets continue to see increases in home prices in June and in the second quarter, appreciation is slowing in most areas of the country.