By Will Parker 

The growth of U.S. home prices continued to slow in April in another sign of a weaker-than-expected selling season.

Average home prices in major metropolitan areas rose 3.5% in the year ended in April, decelerating from 3.7% the prior month and 3.9% in February, according to the S&P CoreLogic Case-Shiller National Home Price Index. The decline reflects decreasing demand and an increasing supply, analysts said.

"Home price gains continued in a trend of broad-based moderation," said Philip Murphy, managing director of S&P Dow Jones Indices.

The pace of home-price growth has been slowing for a year now. But average prices are still increasing in most major U.S. cities and continue to outpace inflation, according to the Case-Shiller report.

U.S. cities with the largest price growth in April included Las Vegas, Phoenix and Tampa, where prices increased by more than 5%. But prices in the largest U.S. cities are growing slower than the country at large.

The report's 10-city and 20-city composite indexes of the largest metropolitan areas increased only 2.3% and 2.5%, respectively. Seattle was the only major city where prices were flat in April.

Economists described the yearlong trend of decelerating price growth as a process of normalization after several years of steep price climbs. "That really starts to wear on affordability after a while, so I think things are evening out," said Ruben Gonzalez, chief economist at Keller Williams Realty, Inc.

Price deceleration persists despite mortgage rates that are near historic lows. Existing home sales figures for May reported earlier this month by the National Association of Realtors suggest there has been a recent uptick in buyers taking advantage of those low rates after a slow start to the selling season. But some economists said that uptick means the housing market might finally start mirroring the growth of the U.S. economy.

For now prospective buyers can expect more modest price increases than were seen in recent years, said Zillow economist Matthew Speakman. "This slowdown has been widely expected for some time, and is likely to give many would-be buyers some much-needed breathing room."

Write to Will Parker at will.parker@wsj.com

(END) Dow Jones Newswires

June 25, 2019 12:43 ET (16:43 GMT)