US home prices nearly match 7-year high

By CHRISTOPHER S. RUGABER
AP Economics Writer

WASHINGTON (AP) -- U.S. home prices rose 12.1 percent in June from a year earlier, nearly matching a seven-year high. But monthly price gains slowed in most markets, a sign that higher mortgage rates may be weighing on the housing recovery.

The Standard &Poor's/Case-Shiller 20-city home price index slowed only marginally from May's year-over-year gain of 12.2 percent, the fastest since March 2006. And all 20 cities posted gains from the previous month and compared with a year ago.

Twin Cities home prices rose about 12 percent over the year ending in June.

David Blitzer, chair of the Index Committee at S&P Dow Jones Indices, said that while prices have been tracking strong year over year increases, the pace of gains may be slowing, and rising interest rates could be dampening home-buyer demand.

Home prices in Las Vegas posted the biggest increase, soaring 24.9 percent from a year earlier. Purchases by investors have helped drive that increase.

Still, 14 of the 20 cities posted smaller gains in June compared with May. That's unusual considering June is the middle of the summer buying season.

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MPR reporter Annie Baxter contributed to this report.