US house price growth slows as demand weakens

Iowa realty home for sale Image copyright Reuters
Image caption Although US home prices are up from a year earlier, that growth has slowed in recent months

US housing price growth slowed to just 0.2% in the first three months of 2014, latest figures show.

According to the S&P/Case-Shiller index, the slowdown in growth compared with the previous quarter was partly caused by tighter bank lending regulations.

Further compounding the problem is rising student loan debt, which has discouraged first-time buyers.

Nationally, US home prices are still up 10.3%, compared with a year earlier.

"The year-over-year changes suggest that prices are rising more slowly," said index chairman David M Blitzer in a statement.

"Among those markets seeing substantial slowdowns in price gains were some of the leading boom-bust markets including Las Vegas, Los Angeles, Phoenix, San Francisco and Tampa," he added.

An index of the housing prices in 20 US cities showed a 0.9% increase in March compared with February.

Although US mortgage rates are near a seven-month low, the US Federal Reserve recently indicated that tighter bank lending standards might be shutting out potential buyers.

Furthermore, there is a low supply of new homes in the US, as the recession put a halt to new home construction in 2008-09.

Since the recovery, many developers have focused on building rental apartment buildings as opposed to single-family homes, which has also put pressure on prices.

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