The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index rose 5.9% annually in May, reaching a new record high. May marked the third consecutive month that prices reached a new all-time high.
“Today’s home price report elicited one response – ouch. Home prices continued to rise as quality inventory remains limited,” say Zonda chief economist Ali Wolf. “An important note, however, is that the data release covers March, April, and May transactions. The market has cooled since then, especially in some markets, as seasonality kicks in and more supply comes online. This doesn’t mean home prices are coming down, but does suggest lower levels of home price appreciation as the year continues on.
The pace of growth was slower in May than the 6.4% annual gain in April, but home prices have appreciated 4.1% year-to-date, the fastest pace in two years.
“While annual gains have decelerated recently, this may have more to do with 2023 than 2024, as recent performance remains encouraging,” says Brian Luke, head of commodities, real & digital assets at S&P Dow Jones Indices. “Covering the six-month period dating to when mortgage rates peaked, our national index has risen the past four months, erasing the stall experienced late last year.”
The 10-City Composite index saw an annual increase of 7.7% in May, down from an 8.1% annual increase in May. The 20-City Composite posted a year-over-year increase of 6.8%, dropping from a 7.3% annual gain in the previous month.
New York reported the highest annual gain among the 20 cities analyzed with a 9.4% increase in Mau. San Diego (+9.1%) and Las Vegas (+8.6) also posted high annual home price gains. Portland posted the smallest year-over-year growth in home prices, a 1.0% increase in May.
“The Big Apple returned to the top of the leader boards, toppling San Diego from its six-month perch,” Luke says. “All 20 markets observed annual gains for the last six months. The last time we saw that long a streak was when all markets rose for three years consecutively during the COVID housing boom.
After seasonal adjustment, the U.S. National Index posted the same month-over-month change of 0.3% as last month, while the 20-City and 10-City Composite reported a monthly change of 0.3% and 0.4%, respectively.
“The waiting game for the possibility of favorable changes in lending rates continues to be costly for potential buyers as home prices march forward,” Luke says.
