Home Prices in 20 US Cities Climbed Less Than Expected in May
Home prices in 20 U.S. cities rose less than projected in May from a year earlier, signaling both buyers and sellers had the potential to benefit during the busy selling season, according to S&P CoreLogic Case-Shiller data reported July 26.
Key Points
• 20-city property values index increased 5.2% from May 2015 (forecast was 5.5%) after climbing 5.4% in the year through April.
• National home-price gauge rose 5% from 12 months earlier.
• On a monthly basis, the seasonally adjusted 20-city measure fell 0.1% from April, following a revised 0.2% decline the prior month, the first back-to-back decrease since June-July 2014.
Big Picture
The report follows a round of more timely data that showed purchases of previously owned homes climbed in June, to the highest level since February 2007, from May. Steady hiring and cheap borrowing costs are encouraging potential buyers, while hurdles for bigger gains in demand include limited inventory, especially among lower-priced properties. Sustained growth in prices may encourage more current owners to put up their dwellings for sale.
Economist Takeaways
“Overall, housing is doing quite well,” David Blitzer, chairman of the S&P index committee, said in a statement. “Regional patterns seen in home prices are shifting. Over the last year, the Pacific Northwest has been quite strong while prices in the previously strong spots of San Diego, San Francisco and Los Angeles saw more modest increases.”
The Details
• All 20 cities in the index showed a year-over-year gain, led by a 12.5% advance in Portland, Oregon.
• Smallest advance was in New York, which saw a 2% increase.
• After seasonal adjustment, Portland had the biggest month-over-month gain at 0.7% and San Francisco had a decline of 1.3%.
• Six cities showed seasonally adjusted price decreases in May over the prior month, including New York, Los Angeles and Cleveland.
