U.S. home price appreciation decelerates in August, home price index rises just 0.1 pct

Home price appreciation in the U.S. decelerates further in the month of August. On a sequential basis, the S&P CoreLogic Case-Shiller 20-city Home Price Index rose 0.1 percent in the month, consistent with consensus expectations. On a year-on-year basis, price appreciation came in at 5.5 percent, four-tenths lower from July; however, still in the 5.5 percent to 6.5 percent range seen over most of the recovery.

Delving into details, out of 20 cities covered in the report, 17 saw home prices rise, rebounding from July when 12 saw price rises. The S&P survey is believed to still be in line with a sound rate of price appreciation, although momentum has decelerated in recent months, stated Barclays in a research report.

The weakening in the housing market is clear in other measures of home price appreciation such as the FHFA and CoreLogic home price indices. Moreover, housing starts and sales data have also decelerated in the recent months.

“In all, we think that worsening home affordability, rising mortgage rates and falling home inventory are all working to restrict housing activity this year and represent headwinds for the housing outlook”, added Barclays.

At 17:00 GMT the FxWirePro's Hourly Strength Index of US Dollar was bullish at 76.7237. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex