The S&P CoreLogic Case-Shiller U.S. National Home Price Index is up again, registering a 5.9% year-over-year gain in May.
That’s down from the previous month’s 6.4% annual pickup, but it nonetheless makes May the 11nth consecutive month with an annual increase in the national index. Month over month, the national index rose by 0.3%, bringing home prices to a new peak and breaking the previous all-time high set in April.
The 10-City and 20-City Composite Indices, which track prices in the nation’s largest metro areas, are up annually as well. The former grew 7.7% from May 2023 (down from 8.1% in the month prior), while the latter saw an 6.8% yearly gain (down from 7.3% one month earlier).
“While annual gains have decelerated recently, this may have more to do with 2023 than 2024, as recent performance remains encouraging,” says Brian D. Luke, head of commodities, real & digital assets at S&P Global. “Our home price index has appreciated 4.1% year-to-date, the fastest start in two years. 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.”
New York had the highest annual gain among the 20 major cities tracked by Case-Shiller in May, posting a 9.4% increase from May 2023. New York’s year-over-year incline knocked San Diego (9.1%) from the top spot; the California city had occupied the loftiest perch in the ranking for the past six months. Portland again had the lowest growth among tracked cities, posting just a 1% annual gain.
“All 20 markets observed annual gains for the last six months,” Luke noted. “The last time we saw that long a streak was when all markets rose for three years consecutively during the COVID housing boom.”
Selma Hepp, chief economist at CoreLogic, expects further year-over-year weakening of home price growth in the short term.
“Home price appreciation will continue to soften as seasonal effects fade and comparison with last year’s spring highs impact annual comparisons,” she projected. “More interestingly, with more markets seeing rapidly cooling prices due to spring’s high mortgage rates and lessening demand, it will be noteworthy to see the impact of falling mortgage rates and potential Fed rate cuts on the homebuyer response. If homebuyers step off the sidelines, we could see home prices heating up again in some markets as a result.”
With the index setting all-time highs by the month, Luke observed that the longer it is until rates finally do turn the corner in earnest, the more time prices will have to keep climbing, even if appreciation is on the decline.
“The waiting game for the possibility of favorable changes in lending rates continues to be costly for potential buyers as home prices march forward,” he said.
