U.S home prices continued to show strong growth in May, rising at more than double the rate of inflation, according to the latest National Home Price Index from CoreLogic and S&P Dow Jones Indices. May is the tenth month in a row that the Index has topped 5% year-over-year growth.
Nationwide, prices rose at just over 6% year-over-year. In West Coast hotspots, prices pushed upwards into double-digit growth. Seattle, Las Vegas, and San Francisco posted the most exorbitant gains with 13.6%, 12.6%, and 10.9% respectively.
- Nationwide, home prices increased 6.4% year-over-year in May
- Over the past year, home prices have continued to grow at two to three times the rate of inflation
- Annual price growth has topped 5% for ten months straight, and it’s starting to affect home sales
Home prices increased 6.4% in May, the same annual increase that was seen the month before, according to the S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, which covers all nine census divisions.
The 10-City Composite posed an annual increase of 6.1% in May, down from April’s increase of 6.4%, and the 20-City Composite increased by 6.5%, down from the increase of 6.7% the previous month.
The West Coast saw the highest annual gains out of all the top 20 cities. Seattle, Las Vegas and San Francisco increased the most with annual home price gains of 13.6%, 12.6% and 10.9% respectively.
Seven of the nation’s top 20 cities reported a higher increase in the year ending in May than the year ending in April.
“Home prices continue to rack up gains two to three times greater than the inflation rate,” said David Blitzer, S&P Dow Jones Indices managing director and chairman of the Index Committee. “The year-over-year increases in the S&P CoreLogic Case-Shiller National Index have topped 5% every month since August 2016.”
“Unlike the boom-bust period surrounding the financial crisis, price gains are consistent across the 20 cities tracked in the release; currently, the range of the largest to smallest price change is 10 percentage points compared to a 20 percentage point range since 2001, and a 25 percentage point range between 2006 and 2009,” Blitzer said. “Not only are prices rising consistently, they are doing so across the country.”
Overall, 19 of the top 20 cities reported an increase in May before seasonal adjustment, and 16 of the 20 cities reported increases after seasonal adjustment.
“Continuing price increases appear to be affecting other housing statistics,” Blitzer said. “Sales of existing single family homes – the market covered by the S&P CoreLogic Case-Shiller Indices – peaked last November and have declined for three months in a row. The number of pending home sales is drifting lower as is the number of existing homes for sale.”
“Sales of new homes are also down and housing starts are flattening,” he said. “Affordability – a measure based on income, mortgage rates and home prices – has gotten consistently worse over the last 18 months. All these indicators suggest that the combination of rising home prices and rising mortgage rates are beginning to affect the housing market.”
View the original article at Housing Wire