Housing Prices Hold Steady
The Standard & Poor’s CoreLogic Case-Shiller Home Price Indexes reported modest home price increases in May, showing a stable trend amid recent market volatility.
The report said the National Home Price NSA Index showed a 4.5% annual gain in May, down slightly from 4.6% in April. The 10-City Composite annual increased by 3.1%, down from 3.3% in April. The 20-City Composite posted a 3.7% year-over-year gain, down from 3.9% in April.
Phoenix led with a 9% year-over-year price increase in May, followed by Seattle at 6.8% and Tampa at 6 % increase. Three of the 19 cities reported higher price increases in the year ending May from a year ago.
Month over month, the National Index posted an 0.7% increase, while the 10-City and 20-City Composites posted increases of 0.3% and 0.4%, respectively, before seasonal adjustment in May. After seasonal adjustment, the National Index posted a month-over-month increase of 0.1%, while the 10City and 20-City Composites were unchanged. Seventeen of the 19 cities (excluding Detroit) reported increases before seasonal adjustment, while 11 of the 19 cities reported increases after seasonal adjustment.
“May’s housing price data were stable,” said Craig J. Lazzara, Managing Director and Global Head of Index Investment Strategy with S&P Dow Jones Indices. “More data will obviously be required in order to know whether May’s report represents a reversal of the previous path of accelerating prices or merely a slight deviation from an otherwise intact trend. Even if prices continue to decelerate, that is quite different from an environment in which prices actually decline.”
Selma Hepp, Deputy Chief Economist with CoreLogic, said signs of growth are still promising, although the proceeding months could tell a different tale.
“Housing market activity stands as a shining light for the U.S. economy and households during these challenging times, and continued demand highlights the importance of housing,” Hepp said. Under the current economic circumstances, the safety and stability homebuying provides may have become even more critical for families. While recent data shows that the current resurgence in COVID-19 cases undermines the sustainability of economic recovery—and may restrain available for-sale homes—home buying fundamentals driven by demographics and favorable mortgage rates suggest housing demand will remain solid.”
The report said as of May, average home prices for the metros within the 10-City and 20-City Composites are back to their winter 2007 levels.
