Home prices in the United States grew by 3.4% in May. This is the 14th consecutive month of slowing home-price growth. What’s more, home prices in Seattle dropped 1.2% over the past 12 months, being the first of the 20 cities in the S&P CoreLogic Case-Shiller Index to lose value since 2012.
Average home price growth in the top 10 metropolitan areas increased of 2.2%, down from the previous month’s 2.3% increase. The top 20 metropolitan areas entered their 14th straight month of slowing price growth, posting a gain of 2.4% year over year, down slightly from 2.5% in April. In addition, 13 of the top 20 metropolitan areas reported lower price increases compared to the previous month. This bucks the trend from April, when half of the top 20 saw an increase from the previous month.
Las Vegas (6.4%), Phoenix (5.7%) and Tampa (5.1%) accounted for the highest year-over-year price increases, while metros with the largest slowdown from the previous year continue to be in the West: Seattle (14.8% point drop), San Francisco (9.9% point drop) and Las Vegas (6.2% point drop). What’s more, Seattle is also experience falling home prices with year-over-year declines of -1.2%. This is the first of the 20 Case-Shiller Index market to experience a decrease in home prices since December 2012.
Despite the cooldown entering its 14th month, observers of the housing market should ease their broader concerns of an imminent housing market correction. We see the cooldown flattening or even reversing course in the coming months, and expect the housing market to continue coming into balance. In the meantime, buyers are likely claiming some ground from what has been seller’s territory over the past few years. If mortgage rates stay low, wages continue to grow, and inventory picks up, we can expect the U.S. housing market to further stabilize throughout the remainder of the year.
To see the full-length version of this update, as well as CoreLogic’s other perspectives on the U.S. housing economy, please visit our insights blog at corelogic.com/insights.
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