Charlotte-area home prices rose 3.6 percent in July from the same month last year as a nationwide trend of cooling appreciation continued, according to Standard & Poor’s/Case-Shiller data released Tuesday.
July marked the second month in a row the Charlotte region has posted lower annual gains. Nationally, appreciation has slowed on an annual basis for eight months in a row.
Case-Shiller said its latest report shows a significant slowdown in price increases. Nationwide, home prices rose 6.7 percent in July from the same month a year ago, according to a composite index of 20 cities. That was down from an 8.1 percent annual gain posted in June.
In the Charlotte region, annual gains have dropped to half of what their rate was at the start of the year.
“While the year-over-year figures are trending downward, home prices are still rising month-to-month although at a slower rate than what we are used to seeing over the past couple of years,” David Blitzer, chairman of the Index Committee at S&P Dow Jones Indices, said in a statement.
Blitzer said home prices are rising at two to three times the rate of inflation.
The slowdown in appreciation is welcome news to some real estate industry officials who say prices rose too quickly in recent years.
“As long as we have gains, it is a good thing” for appreciation to gradually slow from current levels, said Elaine Price, broker in charge for Keller Williams Realty’s University City office.
“I think that it’s unhealthy to have dramatic gains,” she said. “Obviously, it makes it less affordable for buyers. It makes it harder for them to purchase. I would rather see a slow, gradual appreciation over time than the drastic ups and downs that knock people out of the market.”
In Charlotte and elsewhere, low supplies of homes for sale have been considered a key factor in rising home prices, as potential buyers try to outbid one another.
A balanced housing market is one with a six-month inventory, under a widely accepted definition. The Charlotte region’s supply of existing homes has been below that level since November 2012.
Lawrence Yun, chief economist for the National Association of Realtors, said last week that supplies are improving in many parts of the country amid a decline in all-cash purchases from investors. As the investors pulled back from the market, sales of existing U.S. homes fell in August after four straight months of gains.
To be sure, rising prices are a positive for owners who still owe more than their homes are worth. Increasing prices inject equity back into those homes.
U.S. home prices on average remain about 17 percent below the peak hit in mid-2006, according to Case-Shiller. In the Charlotte region, prices are 5.5 percent below their peak in August 2007.
The Case-Shiller report is based on home sales that closed in July, which likely covers purchases that went under contract in May or June.
The report is based on repeat sales only, not sales of new homes.