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First Cut: FHFA House Price Index rose only narrowly in May

The FHFA House Price Index for May rose only narrowly, up 0.1% from April, seasonally adjusted, a meager increase and the smallest month-over-month gain since up 0.1% in January 2015. However, the unadjusted index was up 0.8%, suggesting that prices haven’t lost much upward momentum and hombuyers are paying more for a home and willing to do so while mortgage interest rates have helped affordability.

Compared to a year-ago, the unadjusted index was up 5.0%, the smallest year-over-year rise since 4.7% in January 2015. The underlying trend for home prices has cooled significantly since the peaks seen in the past two years and buyers may have more power to negotiate price at the moment.

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