The Federal Housing Finance Agency (FHFA) reported Wednesday home prices fell just 0.3% in May but rose 4.9% annually when compared to May 2019.
According to the FHFA, the previously reported 0.2% decline for April 2020 was revised to just a 0.1% drop. The annual increase of 4.9% is just shy of the 5.3% increase reported from May 2018 to May 2019.
For the nine census divisions, the 12-month changes were all positive, ranging from 3.7% in the New England division to 6.3% in the Mountain division.
While the annual changes were positive, just one census division—South Atlantic—posted a positive month-over-month change at 0.1%. Two divisions—West North Central and Middle Atlantic—revealed there was no price change.
“U.S. house prices posted a small decrease in May compared to April but remained 4.9 percent higher than a year ago,” according to Dr. Lynn Fisher, Deputy Director of the Division of Research and Statistics, FHFA. “The May HPI results are based on contracts for sale signed in late March and throughout April, which was a period when many states announced stay-at-home orders.
“The number of transactions powering the FHFA HPI in May was down by just over 30% compared to a year ago, reflecting the early effects of COVID-19 shutdowns. Based on the rebound in mortgage applications for home purchases and pending home sales in May, we expect the number of transactions increased somewhat in June.”
Echoing these sentiments, Zillow previously reported the home prices rose 4.3% annually in June to $252,178.
Phoenix led the nation with a 9.6% year-over-year increase in home values. Birmingham, Alabama, reported a 7.6% increase and Memphis saw values rise by 7.5%.
Chicago reported price growth of 0.8% and San Francisco’s home values rose 1.1.
"Buyers have come roaring back to the housing market after the initial shock of the pandemic and layoffs faded, and all signs indicate the hot spring selling season we anticipated has shifted to the summer," said Zillow Economist Jeff Tucker. However, those shoppers are going head to head over a “shockingly small” pool of homes, causing prices to resume their upward climb after a little softness this spring, he continued.