Home price growth continues to slow, according to today’s S&P/Case-Shiller index.

According to the index, home growth rates grew 6.2% nationwide for the 12-month period ending in June, much lower than the double-digit gains seen last year. The S&P/Case-Shiller composite index of 20 major cities through the U.S. increased 8.1% over the same period, down from a 9.4% in May and below economists' expectations of 8.4%.

Home prices appear to be moderating but that’s good news says Shari Olefson, CEO of The Carnegie Group. “Those big increases that we saw last year were not sustainable and in general we’re still seeing an upward trend when you look at the big picture,” she says.

Still, it’s not all roses for Olefson. “What I wasn’t happy with are some of the trends we’re seeing in new construction," she notes.

New homes sales fell by 2.4% from June to July, yet July’s new homes sales were up 12.3% from the previous year. “New construction appears to be up significantly from last year but when you dig beneath the surface what’s up are multifamily homes,” says Olefson. “Single family homes are up by just 1% which defies logic because we’ve had over 3 million single family units that have been converted to residential rentals.”

Some believe that these numbers mean that housing is approaching normal levels, but Olefson disagrees. She sees more potential buyers turning into renters and believes there’s a lack of suitable housing and loan products for what people can afford now.

“A multifamily unit costs about $100,000 and a single family home is about $300,000,” says Olefson. “We are missing literally billions of dollars in economic stimulus from the construction industry in terms of jobs, consumer spending and tax revenue because we’re just not building those single family homes.”

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