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WASHINGTON — U.S. single-family home prices fell sharply on a monthly basis in August as surging mortgage rates dampened demand for housing, closely watched surveys showed on Tuesday.

The S&P CoreLogic Case Shiller national home price index dropped 0.9% on a seasonally adjusted basis after slipping 0.5% in July. Monthly house prices decreased in July for the first time since late 2018. House prices increased 13.0% on a year-over-year basis in August, slowing from July’s rise of 15.6%.

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“As the Federal Reserve moves interest rates higher, mortgage financing becomes more expensive and housing becomes less affordable,” Craig Lazzara, managing director at S&P DJI, said in a statement. “Given the continuing prospects for a challenging macroeconomic environment, home prices may well continue to decelerate.”

The cooling house price inflation was underscored by a separate report from the Federal Housing Finance Agency showing home prices increased 11.9% in the 12 months through August after rising 13.9% in July. Prices fell 0.7% on a monthly basis.

The Fed, staging an aggressive battle with the fastest rising inflation in 40 years, has raised its benchmark overnight interest rate from near zero in March to the current range of 3.00% to 3.25%, the swiftest pace of policy tightening in a generation or more.

That rate is likely to end the year in the mid-4% range, based on Fed officials’ own projections and recent comments.

Data last week showed sales of previously owned homes declined for an eighth straight month in September.

The 30-year fixed mortgage rate averaged 6.94% last week, the highest in 20 years, up from 6.92% in the prior week, according to data from mortgage finance agency Freddie Mac. (Reporting by Lucia Mutikani; Editing by Paul Simao)