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Analysts at Nomura note that the US home price appreciation in major US cities showed a sign of easing in July as the Case-Shiller composite 20-city index slowed to 5.92% y-o-y in July from 6.36% in June.

Key Quotes

“Existing home sales have been slowing recently as lower turnover increasingly constrain sales activity. Recent reports suggest that higher mortgage rates likely have dampened both demand and supply to some degree.”

“Further, home price appreciation, which has been outpacing income growth, appears to be adversely affecting demand for housing while it still remains firm. The University of Michigan consumer surveys, for example, have been indicating that rising prices are increasingly a negative factor for home-buying conditions.”

“The downward pressure on housing market turnover is likely to slow the growth in residential investment in the near term.”