The rate at which home prices in the U.S. grew in the second quarter of 2014 was relatively sluggish, according to a latest report by the National Association of Realtors.
Home prices of existing single family homes went up in 122 of the total 175 metro areas analyzed, on a year-over-year basis. Forty seven of the analyzed regions showed a decrease in prices over the same period.
The rate of price growth is about 11 percent lesser than that of the first quarter.
The national median existing single-family home price in the second quarter was up 4.4 percent from the same time last year. In the first quarter of this year, the price was up 8.3 percent from a year earlier.
The evident slowdown of the price rise rates has been attributed to a cautious buying and selling behavior in the market. In a recent separate survey, Fannie Mae - the government-backed lending giant - found that a large number of Americans are now guarded again taking property decision partly due to the still-recovering economic conditions like income and job growth.
But, NAR experts say that the housing market slowdown is great for buyers right now.
"National median home prices began their most recent rise during the first quarter of 2012 but had climbed to unsustainable levels given the current pace of inflation and wage growth. At this slower but healthier rate, homeowners can continue steadily building equity. Meanwhile, for buyers, increased supply with moderate price gains is giving them better opportunities to choose," Lawrence Yun, chief economist at NAR, said in a statement.
However, NAR noted that the still eminent price increases and tight lending needed to be controlled.
"The improving economy and lower interest rates are increasing the pool of interested buyers. On the contrary, competition remains tight and all-cash offers are still a common occurrence. This inevitably is causing hesitation for some first-time buyers, who are more likely to have lower down payments and need to secure financing amidst tight credit conditions," Steve Brown, president of NAR added in the statement.
According to The Wall Street Journal, the slowdown is indeed a great opportunity for new buyers to take advantage of. Prices are low, inventory is inching up slowly and interest rates are still at record lows - all contribute to a great buying environment.
"From an individual perspective, the best investment you can make is to buy a primary residence. Today financing costs are extraordinarily low. You can get a 30-year mortgage somewhere around 4.5 percent," John Paulson, head of Hedge Fund firm Paulson & Co., said in a statement.
Some are predicting that the market will pick up steam in the coming months.
"We may see a late season summer push in housing activity. Inventory is picking up and mortgage rates are hovering around lows for the year, which make things a bit easier for first-time buyers," Nela Richardson, chief economist at Redfin, told Reuters.
"The economy is normalizing from whatever went wrong in the first quarter. Growth is up and running," Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ in New York, told the agency in an earlier interview.
