Home prices continued their steady year-over-year incline in May, reaching a price growth of 6.4 percent since May 2017, according to the most recent Case-Shiller Home Price Index from CoreLogic [1]. Despite this, hopeful homebuyers still felt a modicum of relief, with annual growth flattening and remaining unchanged since April of this year. Concerns over affordability and low inventory remained a persistent weight on the market this month, keeping prices from any downward turns, despite a peak in rates for 30-year fixed mortgages for 2018.
“The Case-Shiller Home Price Index continues to highlight two important differences in housing market dynamics," Genworth Mortgage Insurance Chief Economist Tian Liu said. "One is geographic, where home prices are rising significantly faster on the west coast in cities with general demand and supply imbalance such as San Francisco, Seattle, and Las Vegas. The second is by price segment, where low-tiered homes in eleven of the 16 cities covered in the Index had year-over-year double-digit growth rates, indicating a demand and supply imbalance in affordable homes.”
Yet again, the markets in Seattle, Las Vegas, and San Francisco led annual home price growth, with prices rising 13.6 percent, 12.6 percent, and 10.9 percent, respectively. Seattle reported its 30th consecutive month of double-digit year-over-year price growth, with no signs of a downturn in sight. Nineteen out of the 20 reporting markets saw monthly gains in May, with just New York remaining flat.
“Home buyers out West drove home prices even higher in May, with Seattle, Las Vegas, and San Francisco leading the charge" Danielle Hale, chief economist for Realtor.com said. "Asking prices of for-sale homes increased 8 percent in May and have maintained that pace in recent months, according to realtor.com data, suggesting that in most markets, home-sellers believe buyers are willing to pay up. Sales prices and volumes will ultimately reveal whether sellers are correct. In the first half of the year, survey data indicated that only 28 percent of successful homebuyers paid less than asking price, but at the same time, existing home sales have slowed, suggesting that some buyers are watching instead of diving in.”