Home prices nationwide inched up 1 percent in August from the previous month and soared 18.5 percent from the year before, according to the latest home price index released Tuesday by the Federal Housing Finance Agency.
But stratospheric year-over-year gains, made possible due to a seemingly endless streak of monthly increases, may have peaked in August as month-over-month price hikes continue to decelerate, according to the agency’s Home Price Index.
“Annual house price gains remained extremely high in August but the pace of month-over-month gains continues to decelerate,” Dr. Lynn Fisher, the FHFA’s deputy director of the division of research and statistics, said in a statement.
“This does not mean house prices are at risk of declining — far from it, they continue to climb at a double-digit pace in all regions — but it does suggest we may have seen the peak in annual gains for the time being,” Fisher added.
Monthly home price changes across the nine census divisions ranged between -0.1 percent in the New England division and 1.9 percent in the South Atlantic division. Meanwhile, annual gains ranged between 14.9 percent in the West North Central division to 25.8 percent in the Mountain division.
The FHFA HPI measures changes in single-family home values based on home sales data across over 400 U.S. cities in all 50 states. The metric is based on “a weighted, repeat-sales statistical technique to analyze house price transaction data.”