The S&P CoreLogic CaseShiller U.S. National Home Price NSA Index, which covers all nine U.S. census divisions, reported a 19.7% annual gain in May, down from 20.6% in the previous month. The 10-City and 20-City Composites both posted year-over-year gains slightly lower than April levels, at 19% and 20.5%, respectively.
“Home price gains slowed for the second consecutive month, reflecting the impact of higher mortgage rates and general uncertainty in the market,” Zonda chief economist Ali Wolf says. “We expect to see further softening in appreciation over the next handful of months as sellers try to make sense of today’s supply and demand dynamics. Remember, though, this Case-Shiller report is backward looking and does not reflect real-time adjustments in the market.”
According to the index, Tampa (+36.1%), Miami (+34%), and Dallas (+30.8%) reported the highest year-over-year price gains among the 20 cities in May. Four of the 20 cities reported higher price increases in the year ending May 2022 versus the year ending April 2022.
“Housing data for May 2022 continue strong, as price gains decelerated slightly from very high levels,” says Craig Lazzara, managing director at S&P Dow Jones Indices. “Despite this deceleration, growth rates are still extremely robust, with all three composites at or above the 98th percentile historically.”
Before seasonal adjustments, the U.S. National Index posted a 1.5% month-over-month increase in May, while the 10-City and 20-City Composites posted increases of 1.4% and 1.5%, respectively. In May, all 20 cities reported increases both before and after seasonal adjustments. Lazzara says a “more challenging macroeconomic environment may not support extraordinary home price growth for much longer.”
“The market’s strength continues to be broadly based, as all 20 cities recorded double-digit price increases for the 12 months ended May,” Lazzara says. “May’s gains ranked in the top quintile of historical experience for 19 cities, and in the top decile for 17 of them. However, at the city level we also see evidence of deceleration. Price gains for May exceeded those for April in only four cities. As recently as February of this year, all 20 cities were accelerating.”
