Data released today shows national home prices slipped year-over-year in May but continue heating up in the short term, with month-over-month prices rising.
Year-over-year, prices fell by 0.5%, down from -0.1% the prior month, according to the S&P CoreLogic Case-Shiller National Home Price NSA Index.
The 20-City Composite posted a -1.7% year-over-year decline, unchanged from the month prior, as home prices have recently seen a boost.
Craig J. Lazzara, managing director at S&P DJI, noted that regional differences are still “striking,” with the West Coast hubs that saw huge migration during the pandemic having the weakest growth.
The Southeast (+2.1%) continues to see strong growth, though this month its top-performer crown was stolen by the Midwest (+2.7%).
Looking at cities, Chicago, Cleveland, and New York saw the biggest gains.
It’s the first time in five years that a cold-weather city topped the list, suggesting that Americans are zeroing in on relatively affordable Rust Belt cities as they struggle to find affordable homes.
But with Midwest prices now heating up too, prospective buyers may face high hurdles moving forward. Homes in almost every U.S. county are less affordable now than they have been in the past, and homeownership expenses now consume one-third of the average American’s wages.
“Home prices in the U.S. began to fall after June 2022, and May’s data bolster the case that the final month of the decline was January 2023. Granted, the last four months’ price gains could be truncated by increases in mortgage rates or by general economic weakness. But the breadth and strength of May’s report are consistent with an optimistic view of future months,” Lazzara said.
This may be bad news for buyers, but homeowners are benefitting.
Equity has sunk from record highs, especially in the West, but most homeowners still have elevated equity. The average U.S. homeowner now has more than $274,000 in equity, up from $182,000 before the pandemic.
The latest Federal Housing Finance Agency House Price Index shows the same trends, with May house prices up 2.8% YOY and 0.7% from April.
“U.S. house prices increased moderately in May, continuing the trend of the last few months,” said Dr. Nataliya Polkovnichenko, supervisory economist in FHFA’s Division of Research and Statistics. “However, house prices in some regions of the country remained below the levels seen one year ago.”
Read More Articles:
Rocket Pro TPO EVP Talks About Target Profit Control
As Rocket’s Jay Farner Retires His Impact Is Remembered
Experts Weigh In: When Mortgage Rates Drop, Will Home Prices Surge?