WASHINGTON, March 31 (Reuters) – U.S. single-family house prices increased moderately in January, but rising mortgage rates as the war in the Middle East drags on could sideline potential first-time buyers from the housing market.
House prices nudged up 0.1% after an upwardly revised 0.3% gain in December, the Federal Housing Finance Agency said on Tuesday. House prices were previously reported to have edged up 0.1% in December. Prices increased 1.6% in the 12 months through January, after advancing 1.9% in December. The slowdown in the year-on-year house price inflation partly reflects last year’s increase dropping out of the calculation.
Housing affordability was improving before the U.S.-Israeli war with Iran boosted oil prices and fanned inflation fears, and resulted in an increase in U.S. Treasury yields. Mortgage rates track the benchmark 10-year Treasury yield. The average rate on the popular U.S. 30-year fixed-rate mortgage has jumped to a six-month high of 6.38% from 5.98% on the eve of the conflict.
Monthly house prices surged 1.7% in the East South Central region. There were increases in the Mountain, West North Central, New England and Middle Atlantic regions. Prices, however, decreased 0.7% in the West South Central region. They eased 0.4% in the South Atlantic and dipped 0.1% in the East North Central region.
On a year-on-year basis, prices shot up 4.4% in the East North Central region and advanced 4.3% in the Middle Atlantic region. There were solid increases in the East South Central, New England and West North Central regions.
Prices fell in the Pacific and West South Central regions. They were unchanged in the South Atlantic region.
(Reporting by Lucia Mutikani; Editing by Andrea Ricci)
