Washington, DC – Home prices remained high in May, dropping slightly from a year before when prices were near record highs and notching a monthly gain from April, according to the latest S&P CoreLogic Case-Shiller US National Home Price Index released Tuesday.
“The rally in US home prices continued in May,” said Craig Lazzara, managing director at S&P DJI. “The ongoing recovery in home prices is broadly based.”
Before seasonal adjustment, prices rose in all 20 cities in May, as they had also done in March and April. Seasonally adjusted data showed rising prices in 19 cities in May, repeating April’s performance. The outlier is Phoenix, down 0.1% in both months.
Month over month, home prices rose in May for the fourth consecutive month. The national index rose 0.7% in May from April, after seasonal adjustment. Both the 10-City and 20-City composites saw increases, too, rising 1.1% and 1%, respectively. Before seasonal adjustments, the national index rose 1.2% from April. May’s increase comes after an uptick in February that snapped a seven-month streak of month-over-month declines.
Year over year, prices continued to decline. The National Composite is 0.5% below its May 2022 level, with the 10- and 20-City Composites also negative on a year-over-year basis. The 20-City Composite posted a 1.7% year-over-year loss, same as in the previous month, which was the biggest decline since April 2012. Regional differences continue to be striking, said Lazzara.
The data shows what he called “The Revenge of the Rust Belt” as the biggest year-over-year prices were in Chicago, up 4.6%; Cleveland, up 3.9%; and New York, up 3.5%. “It’s been five years to the month since a cold-weather city held the top spot,” said Lazzara. “And that was Seattle, which isn’t all that cold.” Since May 2018, the top-ranked cities have been sunbelt cities like Las Vegas; Phoenix; Miami; and Tampa, Florida.
Low inventory keeping prices up
May’s data demonstrated the resilience of home prices as buyers took advantage of the month’s relatively lower rates, keeping the pressure on available inventory, said Hannah Jones, economic research analyst for Realtor.com. “This month’s index data tracks prices for March, April and May, a period during which mortgage rates spanned a 0.5 percentage point range, but largely remained on the low end,” she said. “Slightly lower rates motivated eager buyers to enter the housing market, but dwindling home supply meant that this demand kept upward pressure on prices.” The housing market remains unaffordable for many buyers, but some areas are seeing high levels of competition as a result of low for-sale inventory.
