This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Home Prices Jump in June Amid Higher Rates, Trulia Says

Stocks in this article: XHB IYR

NEW YORK ( TheStreet) -- Higher interest rates are expected to slow the pace of home price gains, but it may be a while before we see evidence of it in home prices.

Real estate company Trulia just released its June Price Monitor, which tracks asking prices -- a leading indicator of home prices.

"Despite rising mortgage rates, prices show no sign of slowdown -- yet," Trulia economist Jed Kolko said.

Asking prices were up 10.7% year-over-year in June and was up in 99 out of the top 100 metros (Philadelphia saw prices dip by a negligible 0.01% year-over-year). Excluding foreclosures, prices were up 11.4%.

Prices were up 1.5% on a seasonally adjusted basis. Asking prices have risen between 1.2% and 1.5% every month.

Trulia's price monitor adjusts for the changing mix of homes sold.

In Oakland, Sacramento, and Las Vegas, prices rose more than 30% year-over-year.

Markets that bottomed as late as six months ago are now seeing strong price increases. Edison- New Brunswick, New Jersey, Chicago Illinois and Baltimore, Maryland, for instance, saw asking prices rise more than 7% year-over-year in June.

The strong rise in home prices coupled with a recent jump in mortgage interest rates has meant that potential first-time homebuyers are now experiencing "sticker shock." Monthly mortgage payments are likely to be much higher than they anticipated originally and it could deter them from buying a home or at the very least, lead them to buy a smaller home.

In the past year, buying a home has become 20 percent more expensive," Kolko said in a statement. "Roughly half of this higher cost comes from soaring home prices, which are up almost 11 percent in the past year. The other half comes from rising mortgage rates, which have added another 10 percent to the overall cost of homeownership. For young first-time homebuyers who don't remember life during and before the bubble, these rising costs are a rude awakening."

Mortgage applications declined 11.7% from a week earlier as mortgage rates hit a two-year high, according to the Mortgage Bankers Association's weekly Mortgage Applications Survey.

The 30-year mortgage rate jumped to 4.58% from 4.46% in the previous week and is at its highest level since July 2011.

Analysts expect home price gains to moderate later this year, as rising interest rates cool buyer demand, while additional inventory will also likely ease the tight supply situation.

-- Written by Shanthi Bharatwaj in New York.

>Contact by Email.

Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,356.87 +288.00 1.69%
S&P 500 2,012.89 +40.15 2.04%
NASDAQ 4,644.3120 +96.4780 2.12%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs