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U.S. home price appreciation decelerates in July, home prices likely to rise at modest rate in rest of 2018

Home price appreciation in the U.S. decelerates further in July. The S&P CoreLogic Case-Shiller 20-city Home Price Index rose in July by 0.1 percent, consistent with consensus expectations. On a year-on-year basis, the house price appreciation came in at 5.9 percent, five-tenths lower from June, but within the 5.5 percent to 6.5 percent range seen over the past year.

The data for June were upwardly revised a bit and now indicate that home prices were up 0.2 percent sequentially and 6.4 percent year-on-year. The S&P survey continues to be in line with a sound rate of price appreciation, according to a Barclays report. Delving into details, out of 20 cities covered, 13 saw rises in home prices, worsening from June, when 17 cities recorded price rises.

The FHFA home price survey for July was also released. It indicated that home prices were up 0.2 percent sequentially and 6.4 percent year-on-year. Within the survey, prices dropped in four of the nine regions surveyed and came in flat or rose modestly in the remaining five. An exception was the South Atlantic region, where prices rose solidly by 1.1 percent sequentially. Similarly to the S&P/Case Shiller survey, a modes deceleration in the annual rate of home price inflation was noted in recent months.

“We expect home prices to increase at a modest pace for the remainder of the year given the combination of strong demand and lean inventories. However, we view worsening home affordability and rising mortgage interest payments as headwinds to home price inflation and activity more broadly”, added Barclays.

At 17:00 GMT the FxWirePro's Hourly Strength Index of US Dollar was neutral at 13.3424. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

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