In May, the prices of homes in the United States experienced a steady increase, maintaining a similar sequential pace to the previous month's performance. According to the data released by S&P Global, specifically from the S&P Dow Jones Indices, while the monthly indicators revealed stable growth, the annual metrics showed signs of deceleration.
The S&P CoreLogic Case-Shiller Index, a key measure of home price changes, reported a modest rise of 0.3% in May after seasonal adjustments, mirroring the previous month's results in April. The composite indices for 10 and 20 cities recorded seasonally adjusted growth of 0.4% and 0.3%, respectively, slight decreases from the 0.5% and 0.4% gains observed in April. On an annual basis, national home prices surged by 5.9% in May, a slowdown compared to the 6.4% increase recorded in April.
The index measuring the performance across 10 cities reported a 7.7% annual gain, down from 8.1% in April, while the 20-city composite index rose by 6.8%, compared to a 7.3% increase the previous month. Brian Luke, who heads the commodities, real estate, and digital assets sector at S&P Dow Jones Indices, commented on the trends: "While annual gains have decelerated recently, this may have more to do with the dynamics of 2023 than those of 2024, as recent performance remains encouraging." He further stated, "Our home price index has appreciated by 4.1% year-to-date, marking the fastest start in two years, showcasing resilience in the housing market." Examining the performance across the 20 tracked cities, New York emerged as the standout market with the highest annual increase in home prices at 9.4%.
This figure signifies a notable shift, as it has now overshadowed San Diego, which had maintained its top position for six consecutive months. Following New York, Las Vegas exhibited a robust yearly gain of 8.6%, reaffirming the appeal of these urban centers. Remarkably, Luke noted that all 20 markets analyzed experienced annual gains for the past six months.
He also cautioned that the ongoing wait for favorable changes in lending rates continues to cost potential buyers, as home prices persist in their upward trajectory. In a separate report, the Federal Housing Finance Agency (FHFA) indicated that home prices were unchanged on a seasonally adjusted basis in May.
This reversal followed the previous month’s upward revision, which initially suggested a 0.3% increase. According to a survey conducted by Bloomberg, the consensus forecast expected a 0.2% rise. Compared to last year, home prices advanced by 5.7% in May, reflecting a stabilizing trend in the market. Anju Vajja, deputy director at the FHFA’s division of research and statistics, remarked on the state of the housing market: "The movement in U.S.
house prices remained flat in May, with the deceleration in appreciation continuing amid slight increases observed in both mortgage rates and housing inventory." Overall, the data reveals a mixed but generally positive picture of the U.S. housing market, as price growth continues but at a slower pace, prompting a cautious optimism among real estate experts and potential buyers alike..