Case Shiller Home Price Index Shows Rising Prices For May 2013
The S&P/Case-Shiller Home Price Index (HPI) released Tuesday presented solid evidence that the housing recovery continued during the month of May.
The Case-Shiller 20-City Index showed increasing home prices for all 20 cities.
Highest Year-Over-Year Gains Included Theses Cities:
- San Francisco, CA 24.50 percent
- Las Vegas, NV 23.30 percent
- Phoenix, AZ 20.60 percent
- Atlanta, GA 20.10 percent
- Los Angeles, CA 19.20 percent
In surprising news, Dallas, TX and Denver, CO posted record year-over-year price gains that surpassed their pre-crisis peaks.
Year-over-year home prices in Dallas increased by 7.60 percent and Denver home prices increased by 9.70 percent year-over-year in May.
Home prices grew by 12.20 percent on a year-over year basis in May; this reading fell short of expectations of 12.40 percent, but moved slightly ahead of April’s reading of a 12.10 percent year-over year increase.
The Case-Shiller HPI is based on a three-month rolling year-over-year average of home prices in the cities surveyed.
Cities Post Month-To- Month Price Gains
On a seasonally-adjusted month-to-month basis, home prices rose by 1.00 percent in May as compared to April. Expectations were for a 1.40 percent increase over April’s reading, which came in at 1.70 percent.
Top Gains From April To May Were Posted By These Cities:
- San Francisco, CA 4.30 percent
- Chicago, IL 3.70 percent
- Atlanta, GA 3.40 percent
- San Diego, CA 3.10 percent
- Seattle, WA 3.10 percent
Analysts noted that home prices for two metro areas in Florida surpassed year-over-year gains in Washington, D.C.; this illustrates home values shifting geographically.
Miami home prices posted a month-to gain of 2.00 percent and a year-over-year gain of 14.20 percent.
Tampa, FL home prices posted a month-to-month gain of 1.80 percent on a year-over-year gain of 10.90 percent.
Washington, D.C. home prices gained 2.00 percent month-to-month in May, but only gained 6.50 percent year-over-year.
Rising Mortgage Rates Are Slowing Price Momentum
It’s important to understand that the data in the Case-Shiller HPI lags a couple of months behind current market conditions; the latest numbers were compiled prior to mortgage rates spiking. Economists expect that the impact of higher mortgage rates won’t be seen in home prices until fall.
Locally, higher mortgage rates have slowed home sales over the past month. As the demand for homes has fallen due to higher mortgage rates, inventories of available homes have expanded considerably, which is starting to create competition among home sellers and will most likely lead to softer home prices, leading into the fall. These factors should portend well for buyers, over the next 5 or 6 months, until next years waves of new buyers start showing up, next January and February.