Radian: U.S. Home Price Gains Slow in May
Radian Group, Philadelphia, said home prices across the United States rose at an annualized rate of 4.5 percent in May from April.
The Radian Home Price Index data released by its Red Bell Real Estate LLC subsidiary also reported home prices rose by 7.8 percent year-over-year, slightly lower than the 7.9 percent recorded last month.
Steve Gaenzler, Radian Senior Vice President of Data and Analytics, said slowing home price growth is not unexpected, given the dramatic COVID-19 impact on the ability to enter into and close many real estate transactions.
“Home price gains across the U.S. slowed in May, a month typically known for accelerating activity, however the month also recorded additional reversals in some of the recent, negative real estate transactional data trends,” Gaenzler said. “Nationally, the weekly counts of properties going ‘under contract,’ a leading indicator to closings and sales, ended the month with higher levels than in the same period of 2019. In addition, the Mortgage Bankers Association reported that applications for new mortgages were accelerating during the month and that the rate of new forbearance requests had begun to decline towards the end of the month.”
Gaenzler added softer home price appreciation across the U.S. compared to the prior month “suggests that the full impact of COVID nationally or locally on home prices may not yet be felt, but we are encouraged by some of our leading indicators.”
Other report findings:
–Median home price in the U.S. rose to $254,826; home prices rose an annualized 5.5 percent over the past three months
–Majority of regions softer from prior month; South and Northeast regions show largest changes. The report said in May, home price appreciation slowed from the prior month in all regions except the Mid-Atlantic, a region that has, so far, reported the most negative HPI impacts during COVID-19. The weakest regions this month were the South and Northeast, while the Midwest continued to be the best performing region. In a change from April’s report, all regions reported positive home price growth in May. The Western region recorded an actual 12-month price appreciation rate (+6.1 percent), a rate higher than its annualized change from April to May (+5.5 percent), but lower than the three-month rate of 6.9 percent. Conversely, the South which recorded a 12-month appreciation rate of 6.8 percent was only able to generate a 2.5 percent annualized growth rate last month.
–All 20 of the largest metro areas of the U.S recorded positive price appreciation in May, but all were at slower rates than reported in April. Two metros in particular, Baltimore and New York recorded higher rates of price growth last month after a series of months with rates well below longer term growth. And while rates were softer this month, Radian noted in 14 of the top 20 largest CBSAs, short term growth rates (three-months) remain higher than longer term rates (12-months).
The weakest metros in May based on their annualized growth included Washington, D.C. (unchanged), Los Angeles (+1.9 percent), Baltimore (+2.1 percent) and Miami (+2.1 percent). The strongest included Minneapolis, Seattle, New York and St. Louis, all with greater than 6.4 percent growth in May.