US home prices slip in June

US home prices growth ticked lower in June, but remained at a solid annual pace of gains amid tight inventory in the housing market, according to private data released Tuesday.

The S&P/Case-Shiller 20-city price index slipped 0.1 percent in June from May. Year-over-year, prices were up 5.0 percent in June, accelerating slightly from the 4.9 percent gain in the prior month.

David Blitzer, head of the Index Committee at S&P Dow Jones Indices, noted the resilience in the housing market as unemployment has fallen and the Federal Reserve has held its near-zero interest rate policy since 2008 to support the US economy's recovery from the Great Recession.

With mortgage rates still near historic lows, home sales have been robust. Sales of 5.6 million existing homes in July hit their best pace since 2007 as inventory shrank, putting upward pressure on prices. Housing starts surged in July, and sales of new homes have been heading higher.

"These data point to a stronger housing sector to support the economy," said Blitzer.

But Blitzer noted possible clouds looming over the housing picture: the Fed's plan to raise its benchmark federal funds rate this year and volatility in the stock market.

"A one quarter-point increase in the Fed funds rate won't derail housing. However, if the Fed were to quickly follow that initial move with one or two more rate increases, housing and home prices might suffer," he said.

"A stock market correction is unlikely to do much damage to the housing market; a full-blown bear market dropping more than 20 percent would present some difficulties for housing and for other economic sectors."