S&P CoreLogic Case-Shiller has issued its National Home Price Index for May, revealing that home prices rose 4.5% annually during the month.
That’s just slightly down from an annual gain of 4.6% in April, with year-over-year price growth essentially holding steady as the coronavirus pandemic persists across the country. The smaller 10-City Composite Index, made up of the country’s 10 largest markets, logged an annual gain of 3.1%, down from 3.3% in May, while the 20-City Composite Index’s year-over-year gain came in at 3.7%, down from 3.9% the previous month.
On a monthly basis, the national index saw an unadjusted 0.65% increase — slowest since the pandemic took hold nationwide in March — while the 10- and 20-City Composites posted gains of 0.3% and 0.4%, respectively. After seasonal adjustment, the national index grew 0.1% month over month, while both composites were flat.
Craig J. Lazzara, managing director and global head of index investment strategy at S&P Dow Jones Indices, called May’s housing price data “stable” despite the slight retreats.
“In contrast with the past eight months, May’s gains were less than April’s,” Lazzara said. “Although prices increased in May, in other words, they did so at a decelerating rate. We observed an analogous development at the city level: prices increased in all 19 cities for which we have data, but accelerated in only 3 of them (in contrast with 12 cities last month and 18 the month before that).
“More data will obviously be required in order to know whether May’s report represents a reversal of the previous path of accelerating prices or merely a slight deviation from an otherwise intact trend. Even if prices continue to decelerate, that is quite different from an environment in which prices actually decline.”
Zillow economist Matthew Speakman called home prices’ stability “a remarkable show of resilience.”
“The housing market has stared the pandemic right in the eye and hasn’t blinked,” Speakman wrote on Zillow’s blog.
Still, with COVID cases on the upswing in some parts of the nation, many questions remain on the horizon, said CoreLogic deputy chief economist Selma Hepp.
“The future of home prices, and the potential impact of business closings on unemployment, is still ridden with uncertainty, especially in light of the recent resurgence in COVID-19 cases,” she said. “With unemployment reaching 14.7% in April, and remaining double-digit since, the rate is anticipated to remain elevated, particularly in areas where local economies have been dependent on sectors hit hard by the pandemic. According to the CoreLogic latest HPI forecast, many of the cities included in the 10-city composite index are forecasted to experience a relatively larger home price decline in the next 12 months.”
Among cities, Phoenix continued to lead the nation in year-over-year price growth, with a gain of 9.0% in May. It’s the 12th straight month that Phoenix has held down the top spot, followed by Seattle (6.8% year-to-year home price growth) and Tampa (6.0%).
Following a trend from the last several months, prices showed particular strength in the West and Southeast, but were comparatively weaker in the Northeast.
