Steel Markets

Case-Shiller: Home Prices Steady in May

Written by Sandy Williams

Home price gains are starting to lose momentum, but an inventory shortage kept prices strong in May despite slower sales.

The S&P CoreLogic Case-Shiller National Home Price NSA Index rose 6.4 percent in May, matching the year-over-year-increase reported in April. The 20-city composite posted a 6.5 percent gain year-over-year, compared to 6.7 percent in April.

“Home prices continue to rack up gains two to three times greater than the inflation rate,” says David M. Blitzer, Managing Director & Chairman of the Index Committee at S&P Dow Jones Indices. “The year-over-year increases in the S&P CoreLogic Case-Shiller National Index have topped 5 percent 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. Not only are prices rising consistently, they are doing so across the country. “

Seattle, Las Vegas and San Francisco had the highest year-over-year gains, at 13.6 percent, 12.6 percent and 10.9 percent, respectively.

“Continuing price increases appear to be affecting other housing statistics,” said Blitzer. “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. 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.”

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