U.S. home prices increased 0.5% on an adjusted basis in May compared with April and were up 2.3% compared with May 2024, according to Cotality’s home price index report.
The index’s 10-city and 20-city composites also slowed in May, with annual growth at 3.4% and 2.8%, respectively. This is down from the March 2024 peak when the 10-city composite index recorded 8.3% growth and the 20-city composite recorded 7.5% growth.
Cotality forecasts home price appreciation will continue to slow.
“Home price increases slowed in May, with inflation-adjusted rates indicating little to no growth,” says Selma Hepp, chief economist for Cotality, in a statement. “While the early spring homebuying season did see some seasonal activity, demand decreased after April and led to smaller home price increases in May.”
“Los Angeles had a significant effect on the overall index, with the region’s slower growth following the wildfires contributing to these results,” Hepp adds. “In contrast, markets in the Northeast and Midwest — such as New York, Cleveland, Boston, Minneapolis, Chicago, and Detroit — benefitted from relative affordability and continued to see strong demand. These areas followed seasonal trends similar to those observed before the pandemic.”
Photo: Peter Thomas
