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Home Price Growth Slows More than Expected

cash-moneyAnnual home price growth across the United States dropped into the single digits in May, continuing a moderating trend, according to the most recent price measure for the month.

The S&P/Case-Shiller Home Price Indices, released Tuesday, showed house prices gained 9.3 percent across 20 of the country's biggest cities, down substantially from the 10.8 percent increase recorded for April and the slowest growth rate since February 2013.

Economists had expected an increase of 9.9 percent for May.

The narrower 10-city composite index fared slightly better, improving 9.4 percent year-over-year. That increase was down from 10.9 percent the month prior.

According to S&P Dow Jones Indices, all cities saw their annual growth rates decelerate except for Charlotte, which was up slightly to 4.7 percent, and Tampa, which held steady at 10.2 percent.

David M. Blitzer, chairman of the Index Committee at S&P Dow Jones Indices, said May's results fit with other housing data over the last few months.

"Prices and sales of existing homes have shown improvement while construction and sales of new homes continues to lag," Blitzer said. "At the same time, the broader economy and especially employment are showing larger improvements and substantial gains."

Month-over-month, both the 10- and 20-city composites posted unadjusted price gains of 1.1 percent, with all cities reporting increases for the second straight month.

Figuring in seasonal adjustments, the picture looks less rosy: Both indices saw declines of 0.3 percent, and 14 of the 20 cities were lower than in April.

As of May 2014, S&P Dow Jones says average home prices across the country are back to their summer 2004 levels and are about 18 percent down from their 2006 peaks.

At the metro market level, both Dallas and Denver continue to set new peaks, while Detroit remains the only city in the report to remain below its January 2000 value.

The S&P/Case-Shiller Indices are the fourth price metric for May released in just the last two weeks. It follows earlier reports from FNC, Inc., the Federal Housing Finance Agency, and Black Knight Financial Services, all of which measure different slices of the market.

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