U.S. home prices are still rising, but the pace of growth continues to slow, according to the S&P CoreLogic Case-Shiller national home price index (not seasonally adjusted) for May released Tuesday. The year-over-year increase of 3.4% was just 0.1 points below the 3.5% increase posted in May of 2018. Month over month, the index rose 0.2% on a seasonally adjusted basis. May was the 14th straight month that home prices have grown more slowly than they did a year ago.
Some cities continue to see sharp increases, but these too are slowing down. Las Vegas home prices are 6.4% higher than they were a year ago, while Phoenix showed an increase of 5.7% and Tampa posted an increase of 5.1%. The only U.S. city to post a year-over-year decline was Seattle, where prices were 1.2% lower than in May of 2018.
On a non-seasonally adjusted basis, the consensus economists’ estimate called for the 20-city average home price to rise by 2.4% year over year and was right on the actual increase.
In all U.S. cities included in the 20-city home price index, May house prices rose 0.6% year over year, with all 20 posting non-seasonally adjusted (NSA) month-over-month price increases.
Philip Murphy, Managing Director and Global Head of Index Governance at S&P Dow Jones Indices, said:
Though home price gains seem generally sustainable for the time being, there are significant variations between [year-over-year] YOY rates of change in individual cities. … Whether negative YOY rates of change spread to other cities remains to be seen; for now, there is still substantial diversity in local trends. Nationally, increasing housing supply points to somewhat weakened demand, but the fact that seven cities experienced stronger YOY price gains in May than they did in April suggests an underlying resiliency that may mitigate the risk of overshooting to the downside at the national level.
Mortgage loan rates had risen slightly to 4.12% Tuesday morning, according to Mortgage News Daily.