U.S. Home Prices Rose 6.9% in February as Recovery Cools

[Purveyor]

By Prashant Gopal Apr 22, 2014 10:41 AM ET

U.S. house prices rose 6.9 percent in the 12 months through February, the smallest gain in a year, in a sign that the housing market’s recovery is cooling.

Prices climbed 0.6 percent on a seasonally adjusted basis from January, the Federal Housing Finance Agency said today in a report from Washington. The average economist estimate was for a 0.5 percent increase, according to data compiled by Bloomberg.

Price gains, driven by competition for a tight supply of listings, may be poised to slow as real estate becomes more expensive, more sellers list houses and homebuilders add to the supply of available properties. The average rate for a 30-year fixed mortgage has climbed by almost a percentage point from a year ago, further reducing affordability.

“We’re still seeing prices growing because inventory is tight,” Patrick Newport, an economist at IHS Global Insight in Lexington, Massachusetts, said in a telephone interview yesterday. “But going forward, we see year-over-year price growth slowly decelerating.”

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http://www.bloomberg.com/news/2014-04-22/u-s-home-prices-rose-6-9-in-february-as-recovery-cools.html

[KurtNYC]

1. This could mean that higher end homes are selling and lowers are not

That would boost the average sale price. Multi-family, McMansions and anything $300K+ are doing well. Entry level not so much.

1/3 of all mortgages in the US are still underwater which means many can't afford to sell until prices rise more.