Case-Shiller: Home Price Growth Continued to Slow in May

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U.S. home prices increased 0.2% on an adjusted basis in May compared with April and were up 3.4% compared with May 2018, as home price appreciation continued to slow, the S&P CoreLogic Case-Shiller home price index shows.

The 10-city composite, which measures home price growth in the 10 largest U.S. cities, saw prices increase an average of 0.1%, month-over-month, while the 20-city composite also posted a gain of 0.1%.

On a non-adjusted basis, the 10-city composite posted a 0.5% increase and the 20-city composite reported a 0.6% increase for the month.

Year over year, the 10-city composite posted an annual increase of 2.2%, down from 2.3% the previous month. The 20-city composite posted a 2.4% year-over-year gain, down from 2.5% the previous month.

Las Vegas, Phoenix and Tampa reported the highest year-over-year gains among the 20 cities.

In May, Las Vegas led the way with a 6.4% year-over-year price increase, followed by Phoenix with a 5.7% increase, and Tampa with a 5.1% increase.

Seven of the 20 cities reported greater price increases in the year ending May 2019 versus the year ending April 2019.

“Nationally, year-over-year home price gains were lower in May than in April, but not dramatically so and a broad-based moderation continued,” says 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.”

Murphy notes that although home price gains “seem generally sustainable for the time being, there are significant variations between year-over-year rates of change in individual cities.”

“Seattle’s home price index is now 1.2 percent lower than it was in May 2018, the first negative year-over-year change recorded in a major city in a number of years,” Murphy says. “On the other hand, Las Vegas and Phoenix, while cooler than they were during 2018, remain quite strong at 6.4 percent and 5.7 percent year-over-year gains, respectively.

“Whether negative year-over-year rates of change spread to other cities remains to be seen; for now, there is still substantial diversity in local trends,” Murphy adds. “Nationally, increasing housing supply points to somewhat weakened demand, but the fact that seven cities experienced stronger year-over-year 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.”

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