WASHINGTON, July 28 (Reuters) – U.S. single-family house prices increased in May and could combine with higher mortgage rates to make home ownership even less affordable for most young people.
House prices rebounded 0.3% after an unrevised 0.1% dip in April, the Federal Housing Finance Agency said on Tuesday. Prices increased 2.2% in the 12 months through May after rising 2.0% in April, supported by a shortage of previously owned houses available for sale, especially starter homes.
The average rate on the popular 30-year fixed-rate mortgage has increased by 60 basis points since the U.S. and Israel attacked Iran at the end of February. The rate averaged an 11-month high of 6.58% last week, data from mortgage finance agency Freddie Mac showed, as a fragile ceasefire between the U.S. and Iran collapsed, raising oil prices and U.S. Treasury yields.
Mortgage rates track the benchmark 10-year Treasury note. The National Association of Home Builders estimates the housing shortfall at about 1.2 million units.
Monthly house prices jumped 1.4% in the East South Central region and rose 1.1% in the Mountain region. There were gains in the South Atlantic, Middle Atlantic, New England, West North Central and West South Central regions. Prices fell in the Pacific and East North Central regions.
On a year-over-year basis, prices increased in eight of the census divisions, with significant gains in the East North Central and Middle Atlantic regions. They fell 0.3% in the Pacific region.
(Reporting by Lucia Mutikani; Editing by Paul Simao)
