The surge in home prices is slowing down

Photo: Glenn Hunt/Getty Images

Home prices in July fell on a month-to-month basis in 20 major US cities, according to the S&P CoreLogic Case-Shiller index.

The 20-city composite fell 0.01%, just under the forecast for a flat reading during the month, according to Bloomberg.

That was the fifth straight month of flat or declining home prices, suggesting that the surge is slowing down in major metropolitan areas.

Monthly data on the housing market tend to be volatile and subject to revisions.

On a year-over-year basis, the index rose 5.1%, more than the expectation for 5.07%, and in line with the pace of appreciation over the past two years. Portland, Seattle, and Denver saw the biggest gains.

“Given that the overall inflation is a bit below 2%, the pace is probably not sustainable over the long term,” said David Blitzer, managing director and chairman of the index committee at S&P Dow Jones Indices.

However, unlike the spike in prices that preceded the 2008 financial crisis, this is unlikely to lead to another collapse because outstanding mortgage debt is comparatively lower, Blitzer added.

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