Clear Capital reported a 4% quarter-over-quarter increase in home prices through the end of August, but the firm is projecting a bumpy future for the fall and winter seasons.
Despite the recent seasonal rise in home prices, year-over-year prices are still down 6.2%.
“Although the summer gains appear to signal strong growth in home prices, it's important to keep in mind that these gains are off of the record lows of winter,” said Alex Villacorta, director of research and analytics at Clear Capital. “With summer coming to a close and the price gains clearly starting to level off, the market is at a critical juncture as to whether it can avoid another significant downturn into the slower buying seasons of fall and winter.”
Quarter-over-quarter price gains continued across the nation's four regions, led by the Midwest with a 7.3% increase. The Northeast saw a 4.9% rise, followed by the South with a 3.5% improvement and a 0.7% uptick for the West.
However, the Truckee, Calif.-based real estate data firm said the rate of growth has begun to slow down compared to previous months. The firm cited the recent fall in the stock market, high unemployment rates, elevated home sales inventory and slow home sales rates as causes for the downturn.
Clear Capital said weakening consumer confidence is also going to impact the housing market after the warm weather home buying season ends.
“The latest readings on consumer confidence paint an ominous picture that at present, consumers are still not ready to risk jumping into the market despite very low mortgage rates and very affordable home prices,” Villacorta added.