Case Shiller Home Prices Index Increases but Pace Slows

By Mark Lieberman

Managing Director and Senior Economist

Highlights:

  • Case Shiller CoreLogic indices ROSE in May, up 0.5 percent in the 10-city index, 0.6 percent in the 20-city index and 0.8 percent in the national index
  • The price index ROSE in all 20 cities surveyed in May, matching April;
  • Year-year growth for the 10-, 20-city and national indices also ROSE but was the weakest year-year growth in seven years
  • Year-year the price index ROSE in May in all 20 cities surveyed, but the year-year increase was slower in 10 of the 20 cities than it had been in April.

Trends:

  • The price index rose in all four census regions led by a 1.3 percent increase in the Midwest;
  • The May increases were slower than April in 13 cities;
  • The price index rose for the 17th straight month in Miami and ninth straight month in Dallas.

Data Source: S&P Case Shiller/Core Logic

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Home values rose for the fourth straight month in May according to the Case Shiller Core-Logic Home Price Index but the year-year growth in values continued to slow.

The month-month price gains in May were weaker than April and year-year growth fell to its slowest pace since September 2012. The weak price growth hasn’t contributed to faster home sales however and in fact just the opposite as would-be home buyers perhaps no longer see homes as strong investments.

The slower home sales are a head-scratcher coming as they do when mortgage interest rates are dropping along with prices which combine to lower monthly mortgage payments. According to the weekly Fannie Mae mortgage rate survey, the average rate for a 30-year fixed-rate mortgage was 3.75 percent, essentially the lowest since November 2016 when the rate for a 30-year loan was 3.57 percent. (The rate for a 30-year loan dipped to 3.73 percent for one week, five weeks ago but has been at 3.75 percent for three of the last four weeks.)

The Case Shiller survey covered the same month in which the National Association of Realtors reported the median price of an existing single-family home rose 4.2 percent with a year-year price growth of 4.9 percent, both far in excess of the numbers in the Case Shiller report.

According to the Case Shiller data, prices rose fastest in the Midwest in May, up 1.3 percent, but also rose in the West, 0.8 percent. Prices in the South were up 0.5 percent and, in the Northeast, up 0.3 percent.

The May price increases were led by Minneapolis (up 1.7 percent), Cleveland (up 1.4 percent and Detroit (up 1.2 percent).

Year-year prices were up 6.4 percent in Las Vegas, 5.7 percent in Phoenix and 5.1 percent in Tampa. Prices fell 1.2 percent year-year in Seattle.

Hear Mark Lieberman this Friday on P.O.T.U.S. radio’s Morning Briefing, Sirius-XM 124, at 6:20 am Eastern Time. You can follow Mark Lieberman on Twitter at @foxeconomics.

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