After more than two years of continuous increases, price growth in the U.S. housing market finally came to the end of its run. House prices fell less than 1% between the end of the first quarter of 2014 and the end of the second quarter, according to the latest Mortgage Market Index report from Fitch Ratings.

The drop was slight, but in sharp contrast to the national average increase of about 20% between the fourth quarter of 2011 and the end of the first quarter of this year. A Fitch Ratings executive said:

The cooling of the US housing market comes as no surprise after several years of unsustainable growth rates. It’s also worth noting that nearly all major cities are experiencing the same home price flattening at the same time.

When mortgage loan rates began rising in the middle of last year, home price increases began to cool. Not only that, but rising prices also cooled enthusiasm from all-cash buyers, typically investors large and small. One new wrinkle is the decision announced Tuesday morning by three federal agencies that drops a requirement that buyers make a down payment of 20% to get a “qualified residential mortgage.” We’ll have more on that shortly.

Fitch Ratings noted that its house price index “reflects” the Case-Shiller seasonally adjusted national home price index, which posted a month-over-month gain in July of 0.5% and an annual gain of 5.6% compared with July of 2013.

New housing starts continue to rise, but the rise is shrinking compared with the previous years. New single-family housing starts rose more than 24% in 2012 compared with 2011, and another 15.4% in 2013 over 2012. This year’s projected growth is a mere 2%.

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