(CN) — Home prices rose in July at the slowest pace in 10 months while home sales stumbled in the face of higher mortgage rates.
According to the latest installment of the S&P CoreLogic Case-Shiller 20-city home price index, released Tuesday, home prices increased 5.9 percent in July compared with a year earlier, down from a 6.4 percent annual gain in June.
This came against a backdrop of a decline in existing home sales — which dropped 1.5 percent in the past 12 months — and accelerating mortgage rates.
Las Vegas (up 13.7 percent), Seattle (up 12.1 percent) and San Francisco (up 10.8 percent) reported the biggest annual gains, with all three cities seeing double-digit increases.
However, in 15 of the 20 cities included in the index, price gains were smaller in July than the previous year.
“Rising homes prices are beginning to catch up with housing,” said David Blitzer, managing director and chairman of the index committee at S&P Dow Jones Indices.
“Sales of existing single family homes have dropped each month for the last six months and are now at the level of July 2016,” Blitzer continued. “Housing starts rose in August due to strong gains in multifamily construction. The index of housing affordability has worsened substantially since the start of the year.”
While demand for housing is still strong, a continued shortage of for-sale listings has overheated prices throughout much of the past year, and buyers have retreated.
Mortgage rates are also impacting affordability. They have been rising steadily for the past few weeks and are now at the highest level in at least seven years.
In other economic news, the Conference Board, a business research organization, said Tuesday that its consumer confidence index climbed to 138.4 in September from 134.7 in August. This month’s reading was the highest since September 2000.
The index measures consumers’ assessment of current economic conditions and their outlook for the next six months. Both improved in September.
“These historically high confidence levels should continue to support healthy consumer spending, and should be welcome news for retailers as they begin gearing up for the holiday season,” said Lynn Franco, the Conference Board’s director of economic indicators.
The U.S. economy grew at an annual pace of 4.2 percent from April through July, the fastest rate in nearly four years. And the unemployment is 3.9 percent, near a 50-year low.