U.S. home prices increased 0.1% in May compared with April as the rate of appreciation continued to slow, the Federal Housing Finance Agency’s (FHFA) most recent home price index report shows.
Year over year, home prices were up 5.0% compared with May 2018.
The report tracks home price changes in nine regional divisions. Regionally, monthly home price gains in May ranged from -1.0% in the East South Central division to 0.5% in the South Atlantic division.
Year over year, home price gains in the nine divisions were all positive, ranging from 3.6% percent in the West South Central division to 6.7% in the Mountain division.
Although home price appreciation has been slowing, some housing data firms are forecasting that it will stabilize, as rising demand and lack of supply converge help elevate prices.
The most recent VeroFORECAST report from Veros Real Estate Solutions forecasts that U.S. home prices will rise an average of 3.7% over the 12 months ended June 1.
That’s flat compared with the previous report but it’s significant in that it shows that home prices are stabilizing as opposed to decreasing.
“This flattening indicates that although there is definite softness overall in the housing market the fundamentals are healthy,” says Eric Fox, vice president of statistical and economic modeling for Veros. “One potential contributing factor we saw in the models is some softening of mortgage interest rates, which is helping to prop up values and stem the decline.”