Home prices across the U.S. climbed for the 49th straight month in May, though the rate of acceleration eased for the fourth consecutive month, according to the latest S&P CoreLogic Case Shiller U.S. National Home Price NSA Index.
Month over month, U.S. housing prices grew 1.2 percent over April, the report found. The 10-City Composite posted a 0.8 percent month-over-month increase, while the 20-City Composite posted a 0.9 percent increase in May. Seasonally adjusted, index recorded an overall 0.2 percent month-over-month increase; the 10-City Composite posted a 0.2 percent decrease, and the 20-City Composite reported a 0.1 percent month-over-month decrease.
Year over year, the report found that in 10 cities, home prices gained 5 percent in May (the same as the prior month), and 4.4 percent over May 2015. This was, however, down from the 4.7 increase over May 2015 the previous month. The 20-City Composite reported a year-over-year gain of 5.2 percent, which was down from April’s 5.4 percent year-over-year increase.
Portland, Seattle, and Denver reported the highest year-over-year gains among the 20 cities over each of the last four months. In May, Portland led the way with a 12.5 percent year-over-year price increase, followed by Seattle at 10.7 percent, and Denver with a 9.5 percent increase.
“Overall, housing is doing quite well,” said David Blitzer, managing director and chairman of the Index Committee at S&P Dow Jones Indices. “In addition to strong prices, sales of existing homes reached the highest monthly level since 2007 as construction of new homes showed continuing gains.”
Blitzer also said that regional patterns in home prices are shifting.
“Over the last year, the Pacific Northwest has been quite strong while prices in the previously strong spots of San Diego, San Francisco, and Los Angeles saw more modest increases,” he said. The two hottest areas during the housing boom were Florida and the Southwest. Miami and Tampa have recovered in the last few months while Las Vegas and Phoenix remain weak. When home prices began to recover, New York and Washington saw steady price growth; now both are among the weakest areas in the country.”
Ralph McLaughlin, chief economist at Trulia, echoed Blitzer’s regional perspectives, saying that though Western markets continue to dominate price growth, “several markets east of the Mississippi are picking up. Year-over-year price growth Minneapolis and Washington, D.C both reached 22 month highs.”
McLaughlin also pointed out, however, that May was the fourth straight month in which the year-over-year increases were smaller than the previous month.
“This is a sign that the U.S. housing market may be cooling In the wake of double-digit price appreciation between 2012 and 2014,” he said. “While the S&P/Case-Shiller National Home Price Index is an important metric to watch, it’s worth noting that the measure is more reflective of price movements in premium homes rather than middle or lower-tier homes.”
Eight cities reported greater price increases in the year ending May 2016 versus the year ending April 2016, according to the index.