Las Vegas home prices rose fastest among major markets again in July as affordability concerns help spark a U.S. housing pullback.
Southern Nevada prices were up 13.7 percent in July from a year earlier, compared to 6 percent nationally, according to the S&P CoreLogic Case-Shiller index released Tuesday.
The valley’s growth rate was fastest among the 20 metro areas listed in the report for the second straight month. Before it topped the list, Las Vegas had been No. 2, behind Seattle, for 10 consecutive months.
After accelerating for a year or so amid strong demand and low inventory, Las Vegas’ market has shown some signs of pulling back in recent months. But as Tuesday’s report shows, it was more heated than most this summer.
Price growth has slowed in most of the regions tracked for the Case-Shiller index, and U.S. resale totals have dropped for six consecutive months, the report said.
At the same time, an index measuring housing affordability “has worsened substantially since the start of the year,” David Blitzer, managing director and chairman of S&P Dow Jones Indices’ index committee, said in a statement.
The Western U.S. “continues to dominate home price growth,” but the “inevitable softening of the housing market appears to be upon us,” Cheryl Young, senior economist at listing site Trulia, said in a statement Tuesday in response to the report.
Buyers who have been “locked out of the market for some time will be heartened” by data showing a slowdown in sales. But these house hunters “will still confront severe affordability challenges” that are helping push down sales totals and price growth, she added.
One issue is higher borrowing costs. The average rate for a 30-year home loan rose to 4.65 percent last week, according to mortgage giant Freddie Mac. That’s up from 3.83 percent a year ago.
“Coupled with mortgage rate increases, higher prices are stifling home sales as more buyers are priced out of the market,” Danielle Hale, chief economist at Realtor.com, said Tuesday.
Contact Eli Segall at email@example.com or 702-383-0342. Follow @eli_segall on Twitter. The Associated Press contributed to this report.