Home appreciation in 20 U.S. cities slowed to its weakest level in almost seven years in June, as home price gains continued to cool across the country, data compiled from S&P CoreLogic Case-Shiller released on Tuesday showed.

Home price growth in 20 metro areas increased 2.1% from a year earlier in June, compared with a 2.4% in May. This was the smallest annual increase since August 2012.

Analysts polled by Reuters had forecast a 2.4% year-over-year gain in June.

Key Insights

• The data underscore the overall housing market slowdown in the past year and hurdles that potential buyers confront, such as mounting personal debt and home price increases that have outstripped income gains until recently. At the same time, the solid labor market is supporting sales.
• The weakest results were concentrated in West Coast markets Seattle, San Francisco, and San Diego, while southwestern markets Phoenix and Las Vegas maintained their lead.
• Another report Tuesday, from the Federal Housing Finance Agency, showed prices rose 4.8% in June from the same period a year earlier, and 0.2% on a month-over-month basis. The advance from May matched the median forecast. The FHFA gauge is based on conforming, conventional mortgages purchased or securitized by Fannie Mae or Freddie Mac.
• Another recent report showed existing home sales rose to a five-month high in July on lower borrowing costs and smaller home-price gains. Other data show housing starts for single-family homes climbed to the highest level since January as building permits rebounded.
• Seattle posted the only decline among the main 20 cities, dropping 1.3% from a year earlier after a 1.2% slump that was the first decrease since early 2012.
• The annual increase in the main index was slower than all estimates in Bloomberg’s survey of economists, who had projected a 2.3% rise.
• Lower mortgage rates are likely to support demand as well as home-price gains, according to FHFA Senior Advisor for Economics Lynn Fisher. “This should lead to a longer summer buying season and potentially a higher rate of appreciation,” she said in a statement.
• A separate report Tuesday from the Conference Board showed that 6% of respondents in August said they plan to buy a home within six months, down from a reading of 7.4% that was the highest since 2017.

Official’s View

“Home price gains continue to trend down, but may be leveling off to a sustainable level,” Philip Murphy, global head of index governance at S&P Dow Jones Indices, said in a statement.

Material from Bloomberg and Reuters has been used in this report.