U.S. home prices rose half a percent in August. But number three U.S. homebuilder Pulte says its average selling price rose only 8 percent last quarter- its slowest growth in home prices in 2 years. Bobbi Rebell reports.
Sold! Pulte Group, the nation's number three home builder, says business is chugging along. Prices are up - and they say demand is still strong. They even offered 8 percent fewer discounts last quarter. Average selling price: $334,000. But the 8 percent price hike they were able to pass on to consumers was actually down from 12 percent in the previous quarter. In fact it was the slowest growth in home prices in 2 years. Fact and Opinion Chief Economist Bob Brusca: SOUNDBITE: BOB BRUSCA, CHIEF ECONOMIST, FACT AND OPINION ECONOMICS (ENGLISH) SAYING: "We know that the housing indices that we see for existing home sales, for example, and for new home sales, have been slowing down to some extent. So we know that the house industry is undergoing some degree of cooling." Consumers may like new homes. But as prices climb, home builders are seeing consumers take a second look at existing homes, which rose to a one year high in September. New government data showed U.S home prices up half a percent in August - but up close to 5 percent year over year. SOUNDBITE: BOB BRUSCA, CHIEF ECONOMIST, FACT AND OPINION ECONOMICS (ENGLISH) SAYING: "Seeing the house price index rise slightly is good news. It's interesting. It's certainly too soon to say that housing prices have undergone another adjustment and that now they are going to keep at this pace. But a 4.8 percent increase in house prices still keeps it well ahead of the growth in wages for example, and well ahead of inflation, and I think that pace is still too high to be sustained." Even as mortgage rates fall even lower and the likely timeline of a Fed rate hike grows longer. Bank of Tokyo-Mitsubishi's Chris Rupkey: SOUNDBITE: CHRIS RUPKEY, CHIEF FINANCIAL ECONOMIST, BANK OF TOKYO-MITSUBISHI (ENGLISH) SAYING: "Housing is very critical. The only 2 things Yellen has mentioned recently, the risks to the outlook, are the global risks you know worldwide growth, and housing. So yeah, housing is very important. Some of these final numbers like new home sales tomorrow will be important in their deliberations. " One more piece of data for the Fed before it meets next week: New Home Sales for September- which surged 18 percent to a 6-year high in August - come out on Friday.