Home price increases continued to slow in May, according to the latest data from the S&P CoreLogic Case-Shiller Indices.
The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index recorded a 3.4 percent annual gain in May, down from 3.5 percent in April. The 10-City Composite annual increase was 2.2 percent, down from 2.3 percent in the previous month, while the 20-City Composite saw a 2.4 percent year-over-year gain, down from 2.5 percent in the previous month.
Before factoring in the seasonal adjustment, the National Index posted a month-over-month increase of 0.8 percent in May while the 10-City Composite posted a 0.5 percent increase and the 20-City Composite reported a 0.6 percent increase. After the seasonal adjustment, the National Index recorded a 0.2 percent month-over-month increase in May while the 10-City and the 20-City Composites both reported a 0.1 percent increase. Nineteen of 20 cities reported increases before the seasonal adjustment, but only 13 of 20 cities reported increases after the seasonal adjustment.
“Nationally, year-over-year home price gains were lower in May than in April, but not dramatically so and a broad-based moderation continued,” said Philip Murphy, managing director and global head of index governance at S&P Dow Jones Indices. “Among 20 major U.S. city home price indices, the average year-over-year gain has been declining for the past year or so and now stands at the moderate nominal year-over-year rate of 3.1 percent.”
Tian Liu, chief economist at Genworth Mortgage Insurance, commented: "Growth in home prices, as measured by the Case-Shiller Home Price Index, began to stabilize in May. The more than 100 basis point decrease in mortgage rates since November has revived home sales and given buyers additional purchasing power in the market. That extra purchasing power is beginning to show up in home prices. Despite the stabilization, home price growth has slowed from over six percent in early 2018 to less than three percent in May. That slowdown has made homes less attractive as an investment, especially for investors with a shorter time horizon, even though the cost of financing has decreased. This is one factor contributing to the slower than expected rebound in home sales this year.”