U.S. single-family home prices increased in August, while rising mortgage rates continued to weigh on housing demand, according to data released Tuesday by the Federal Housing Finance Agency.
House prices rose 0.3% from July to August, the FHFA said. The agency revised July’s increase downward to 0.2% from the previously reported 0.3%.
Prices increased 2.4% over the 12 months through August, compared with a 2.5% annual gain in July.
The latest figures come as higher borrowing costs and home prices fuel concerns about housing affordability.
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Reuters reported that mortgage rates have climbed amid the U.S.-Israeli war with Iran and the inflationary effects associated with the conflict.
The average rate on a 30-year fixed-rate mortgage stood at 7.32% last week, according to Freddie Mac data cited by Reuters.
The rate had risen by more than 140 basis points since the conflict began at the end of February, although it eased slightly in the latest weekly reading.
Higher mortgage rates increase the cost of financing a home purchase, adding to the financial pressures facing prospective buyers, while affordability concerns have also become a prominent theme in campaign messaging ahead of the Nov. 3 midterm elections.
The FHFA data showed that home price movements differed across the country in August. Among the nine census divisions, East South Central recorded the strongest monthly increase, at 2.1%. New England posted the largest decline, with prices falling 0.8%.
Prices also recorded gains in the West North Central, West South Central and East North Central divisions, whereas the Middle Atlantic division reported no monthly change. Overall, five of the nine divisions recorded monthly price increases.
On an annual basis, prices rose in all nine divisions. East North Central recorded the largest increase, at 4.4%, while the Mountain division had the smallest gain, at 0.5%.
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The FHFA House Price Index measures changes in single-family home values using a weighted repeat-sales methodology.
Its flagship index uses seasonally adjusted, purchase-only data from Fannie Mae and Freddie Mac. The agency also publishes other indexes incorporating refinancing transactions, mortgages insured by the Federal Housing Administration and property records.